Why Do Financial Institutions Use Chexsystems?

Why do most financial institutions in the USA use Chexsystems for consumers who want to open up a bank account? Because the account verification services provided help the banks lower the potential risks involved. Many consumers have experienced problems with bank accounts in the past, with overdrafts, closed accounts due to insufficient funds, and sometimes even bank fraud or suspicious activities. Financial institutions want to verify that the consumer trying to open an account will not run up large fees and write out bad checks. Litigo can help you solve your issues.

Consumers who have a prior history of poor account management and financial problems are much more likely to run into trouble with a new account as well. Banks make a lot of money every year on overdraft fees and other charges that are a result of poor money management and budgeting. Some consumers make these activities a habit though, and this means that the bank could end up not being able to collect what is owed.

Litigo Inc. is not owned, operated, or affiliated in any way with Chex Systems Inc. or its parent Fidelity National Information Services (also known as FIS). Litigo cannot remove, update, or verify a consumer’s file in the CHEXSYSTEMS database, which is owned and operated by Chex Systems, Inc. Litigo can assist you in filing a dispute against the negative information that banks have reported to Chex Systems. Contact Litigo for assistance 1(877) 432-4818.

When a consumer is reported to Chexsystems by the financial institution this record is kept for 5 years. Any time during this period that the consumer tries to open up a new account the bank will be alerted to the prior activities on record. This is only true if the financial institution in question uses the account verification service, but more than 80% of the banks in the USA do. Don’t get stuck with second chance checking contact Litigo today.

Identifying high risk consumers helps banks and other types of financial institutions keep costs low for all customers. Losses that the bank has to absorb can increase the costs of the services offered to other customers who have accounts, and some very small banks could go under if the losses are too large from customer defaults in any given year.

A majority of the financial institutions use Chexsystem to weed out undesirable consumers who may be out to commit fraud on the bank or credit union, as well as consumers who have very poor money management skills and tend to get into trouble with managing the account. Many banks use the service as just one of many tools utilized to determine whether to allow a consumer to open a new account. Contact Litigo today for help.

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