In a recent blog, I commented about a media story regarding consumers unable to open checking accounts because of relatively minor infractions such as bouncing a check or overdrawing an account. I stated, among other things, that consumers need to do their part by learning the rules of using their checking accounts and to play by them. Well, apparently it's not just consumers who need to learn to play by the rules! Certegy Check Services Inc., one of the major consumer specialty reporting bureaus that deals with checks, has been sued by the Federal Trade Commission and lost big-time.
Who are these guys?
Consumer specialty reporting bureaus are not well-known to most of us. There are dozens of them, and they report your activity in areas such as gambling or prescription drug usage. And yes, they're looking to see if you've ever bounced a check. Certegy contains only negative information, so you may not have a file at all unless you overdrew your checking account. That is, unless they made a mistake. Like other consumer reporting bureaus (Experian, Equifax and TransUnion) they come under the Fair Credit Reporting Act, or FCRA. That means they must furnish you with a free annual copy of your report upon request. And if there are errors on your report, you can file a dispute, and Certegy must fix any problems in a timely manner. Certegy has been penalized $3.5 million for allegedly failing to handle these disputes in a proper manner.
The FTC says Certegy didn't follow proper measures to assure that the consumer information it provided was as accurate as possible. Its ineptitude caused a lot of consumers a lot of unnecessary embarrassment, time and perhaps money. In addition, Certegy did not have a streamlined process in place whereby consumers could obtain their free annual reports, which is a requirement of the FCRA.
How to protect yourself
My advice to Certegy is the same as it was to consumers: Know the rules, follow them and take responsibility for your actions. And if you believe you were denied access to a checking account or suffered a similar setback due to inaccurate information from Certegy, I recommend that you obtain a free annual report from Certegy and dispute the inaccurate information.
Should you have any trouble accessing your report or getting your dispute resolved, send a copy of the settlement and a complaint to your state's attorney general. You can also contact the Federal Trade Commission's Bureau of Consumer Protection at (877) 382-4357.
Steve Bucci is Bankrate's Debt Adviser and the author of the popular "For Dummies" series books: "Credit Management Kit for Dummies" and co-author of "Managing Your Money All-In-One for Dummies." To ask a question of the Debt Adviser, go to the "Ask the Experts" page and select "Debt" as the topic. Read more Debt Adviser columns and more stories about debt management.