Non Telecheck Banks
Non Telecheck Banks
Telecheck is one of those companies (like Chexsystems) that you rarely ever hear about until you or someone you know runs into an issue with them. Then you look for information about them and you’re surprised to learn how big, important, and pervasive they are in your financial life. The truth is, not many people have heard of Telecheck, and even less know exactly what it is that they do. Believe it or not, TeleCheck has more than 342,000 merchant account locations, and processed $171 billion in checks in 2001.
Telecheck is an industry leader in electronic check acceptance and processing. Their client network includes thousands of retailers and financial institutions, and its goal is to protect those companies from check-related losses and fraud. It does so by maintaining a live database of check and bank account debt records, as reported by hundreds of thousands of merchants. So when you use a check to pay for a purchase, the merchant uses the terminal provided by Telecheck to send the company information about the check. TeleCheck can then verify the presence or lack of unpaid debt related to a check writer, and provide check acceptance decisions according to what it finds.
Because Telecheck has such a wide network and has shown the ability to effectively help businesses’ risk when accepting checks, companies have come to rely on it to make their decisions regarding checks that they receive. Once you hand out your check and it’s processed through the terminal, things get very simple. If no red flag shows up, your check is accepted, and if there is a red flag, your check will be rejected.
The main advantage of this system is that businesses are able to accept customer checks as easily and efficiently as accepting credit cards, while saying goodbye to bounced checks and returned check fees. What happens behind the scenes is that Telecheck reviews your information; upon seeing that you’re a “good” customer, it guarantees payment to the business by turning your paper check into an electronic check which will be processed at a later date.
Over time, Telecheck has been able to create positive and negative databases which are online and constantly updated to provide the most accurate check writer information available from financial institutions and merchant account locations throughout the world. This is where the banks come in: they use these nationwide databases to report negative experiences with their customers. If you have fraudulent activity on a bank account, your account is closed due to NSF checks with a negative balance, and you don’t pay it right away, the bank will report this to Telecheck or Chexsystems. Having your name on this database will make it difficult to obtain a checking account in the future, until you pay it off and have your information removed from their records.
If your check is returned, the businesses that accepted it will report it to Telecheck. They will still get paid, because TeleCheck guarantees the full amount of any check it approves, as long as all of TeleCheck’s easy requirements have been followed at the point of sale. Telecheck offers what’s known as a check guarantee service: they assume the collection risk should the checks be returned. They’re one of the most popular bad check databases, and being listed can make it difficult to have any business accept your checks.
Businesses that use the TeleCheck check guarantee service can accept low numbered, out of town, and even out of state checks with confidence that they will be paid for the amount of any check that TeleCheck has approved. TeleCheck reduces merchants’ risks when they accept checks, while providing an easy, hassle free payment option.
Once reported to Telecheck, the entry will remain until the check is paid in full. How long you stay in Telecheck is entirely up to you: they act as a collection agency and a credit bureau. However, unlike some of its competitors Telecheck does remove the check writer from their bad check databases once payment is made. If the customer chooses not to pay for the returned draft, then their information could be reported for as long as 7 years. However, most bad check databases including Telecheck will remove the entry after 5 years of reporting time.
Some banks and credit unions will also review bad check databases, including Telecheck, before issuing an account to a new customer. Non Telecheck banks are banks that do not bother with the verification process outlined above.