checking

Checking blunder earns ChexSystems black mark

Don TaylorDear Dr. Don,
My checking account was recently closed by my bank because I wrote a check to myself, deposited it into an ATM and withdrew $200 the day before my direct deposit came in. When I checked my balance the next day, the account was overdrawn for $300 due to an error made by my company's payroll department -- the deposit didn't come through. I informed the bank and deposited $500 cash in order to bring my balance back to positive.

The next day, the bank closed both my savings and checking accounts and reported the matter to ChexSystems. I tried disputing it, but they refused to remove the information from my ChexSystems report, and ChexSystems is not helping me. Is there something I can do to have the incident removed?

Thanks,
-- Daniel Depositor

Dear Daniel,
It's a hard lesson, but the bank took such drastic measures because of your actions. Writing a check against your account and depositing it to that account doesn't result in any money being added to the account. To then withdraw money from the checking account based on the nonexistent deposit looks like you were trying to defraud the bank. The bank no longer wants you as its customer. It has the right to close your accounts.

Consumer reporting agency ChexSystems has an obligation to investigate any disputed information on an individual's ChexSystems report. The company has about 30 days from the day the dispute is filed to decide if the reported information is in error. (The window is a shorter 21 days for residents of Maine.) If ChexSystems sides with the financial institution, you have the right to put a statement in your file about the matter. The negative information stays on your ChexSystems report for five years.

If you've already lost your dispute, then consider filing a statement to put on your ChexSystems report. Then it's time to move on and to try to find a financial institution that will accept your business. Many won't want to give you a new checking account, so you need to find one that doesn't rule you out because of that negative information on your report. You'll have better luck with credit unions and local banks than you will with the large regional and national banks.

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