CHEX, the bank credit monitoring agency you may not know about: Internet Scambusters #797
Have you heard of CHEX? They've almost certainly heard of you!
They're the biggest of a group of agencies that monitor how you manage your bank account, assessing your wealth and providing their own credit score.
But you can find what they've got on you for free, and that's also a great way of finding out if someone else opened a bank account in your name, as we report in this week's issue.
Now, here we go...
Is the CHEX Bank Account Monitoring Agency Watching You?
You probably thought you knew about all the bureaus and agencies that keep tabs on your credit, insurance and financial dealings, but here's one you may not know about: CHEX.
As you know, monitoring the information these agencies hold is an important part of your financial security. They're a way of spotting if you're a victim of identity theft or if the agency is storing and reporting incorrect information about you.
In the past, we've explained how to get your credit report and score from the three big credit reporting agencies -- TransUnion, Equifax and Experian. And we've also reported on the system that insurance companies use to track any claims you make and certain other financial information - CLUE: the Comprehensive Loss Underwriting Exchange.
In fact, there are scores of organizations who keep track of various aspects of your consumer behavior. You can find them all listed in a newly-published, downloadable list from the U.S. Consumer Finance Protection Bureau.
So, What is CHEX?
It's a banking credit agency use by nearly all banks which, among other things, ranks your wealth on a scale from 0 to 6.
CHEX and a number of other agencies, including TeleCheck and Early Warning Systems, monitor your bank accounts and how well, or otherwise, you handle your relationship with the bank -- such as having an overdraft or a bounced check.
But from a personal security and ID theft point of view, CHEX also monitors any attempts to open a new account in your name.
According to a recent investigation on the New Jersey website nj.com, CHEX information does not affect your credit score or loan applications. Its main purpose is to identify if you've ever "abused" your bank.
"That's a pretty good reason to make sure your report is accurate," says report author Karin Price Mueller, "but you have an even better reason to check these reports: to make sure no one is using your personal information for nefarious purposes.
"A scammer could open an account in your name. Perhaps the con artist writes checks in your name -- checks that are sure to bounce. Or they open a credit card along with the checking account, and start shopping, hoping to leave you with the bill."
There's another important reason for seeing what CHEX has on you: Remember the Wells Fargo scandal in which it was disclosed that bonus-hungry employees had opened millions of fake accounts in customer names in order to earn new-business commission? Your CHEX report would have shown if you were a victim.
Another valuable reason for checking your CHEX is to discover possible old, disused accounts you never closed and forgot you had. If they're with the same bank you currently use, you may be running up account maintenance charges without realizing it.
In the banking biz, these are referred to as "zombie accounts" and you could be on the hook for charges you're not aware of.
"The negative balance could result in a stain on your ChexSystems report, which in turn could prevent you from opening new accounts at other banks and credit unions," Price Mueller writes.
"The stain could spread if the bank turns over the negative balance information to a collection agency, and that would hurt your credit score."
Fortunately, it's relatively easy -- or should be -- to get a copy of your report from CHEX or any other bank account monitoring agency.
In the case of CHEX, you're entitled to a free copy of your report, something CHEX calls a FACTA report, every 12 months. Or if you've been denied an account and CHEX was used in the decision, you can ask for a "consumer disclosure report."
CHEX also creates a Consumer Score for banking customers. This is similar but not the same as the credit scoring system used by the big the "big three." It uses the same range -- 100 to 899.
You can request your information online, by phone or via snail mail, and CHEX says you'll receive your information via USPS within five business days. If you find any errors in your report, you can contact them to challenge the information they're holding about you.
Of course, it's possible your bank might use another bank credit agency to monitor your activities -- so ask them who they use. If it's not CHEX, find out who it is and do an online search to find out how to get your report and challenge inaccuracies.
Alert of the Week
The U.S. Social Security Administration won't be phoning you to tell you about a computer glitch that's mixed up your Social Security number and that they need you to confirm the number.
We've seen a spate of these phishing scam calls recently, so just hang up if you get one!
That's all for today -- we'll see you next week.