Some banks have online applications that will approve immediately. Then the bank will wait until the signature card is sent in to actually look at the Chexsystems report. At that point, they will send back the initial deposit and close the account.
Then there are other banks that do "sweeps" on accounts. This is where the loss prevention department of a bank will do a random check on accounts to see if there is a chexsystems report after it has been opened. If they find that the customer has a chexsystems record, they then will determine that they person may be a risk and they will freeze account, and later close it.Some banks run " sweeps" on accounts even years after they have been opened and in good standing. They are completely random as to when and who they will check.
For these reasons I always suggest that if you have been reported to chexsystems that you try to find a bank that does not use ChexSystems if at all if possible. Now an exception to this rule is if a bank opens an account and is aware of the chexsystems report. Most times you will be fine. Unfortunately, there have been situations that were reported to me where for example a manager of a branch decides to open an account and over ride the chexsystems report for the customer. Then later the loss prevention department determines that the manager was incorrect to open the account and once loss prevention decides it is a potential risk, they will freeze the account and then close it.
These situations can create a very bad situation for some customers especially if they have all of their money in this one account when it is frozen and closed. If a bank does decide to freeze an account, they will not allow a customer access to their money for a period of time that is normally 30 days or more. I can not begin to tell you the horror stories that I have heard over the years when this happens. Because of this, I suggest that you always have a back up account if you are going to bank with a bank that uses chexsystems. (see a story here)
Important Note Regarding Frozen Funds:
Fight It!
1) Go into the bank and speak with the branch manager where you have the account.
2) Demand to see in writing where the Federal Reserve allows them to hold your funds for that extended period.
3) Send a fax to both the local branch manager and a bank executive [VP], demanding your money. Ask them to show you legal proof that allows them to hold your funds hostage
3) In the fax, tell them if they do not release your funds immediately, you will find complaints with the following authorities:
- The Attorney General for Your State
- The State Agency that Regulates the Bank
-The FTC
-The OCC
Another reason banks will close accounts. Be careful not to deposit a bad check.
Three primary rules about deposits:
1 - The primary account holder is responsible for any deposits.
2 - Always verify if a check is good with the issuing bank. If you cannot verify, then request a cashier's check from the issuer. Then - verify the cashier's check before depositing it.
3 - Never accept checks from individuals you do not know. If there is not an established business or personal relationship, you are taking a huge risk.
Legally, the account owner is bound by the agreement that was signed when the account was opened. Most standard agreements indicate the primary account holder is responsible for deposits and will maintain the account in a positive status.
1. Contact the branch manager where the account was opened. Ask them for the final statement showing all transactions immediately before the closing.
2. Also, try to work out a payment arrangement that included Chexsystems removal - or at the very least an entry update that shows the account charges were paid and no abuse or fraudulent activity is reported.
If you plan not to pay off the bank, you can still attempt removal through chexsystems by looking for any type of inaccuracy on your report
Another great feature in some cities are the ING DIRECT cafes. These are cafes where you can do everything that you can do at any bank branch.
Chicago
Location: 21 E. Chestnut Street
Los Angeles
Location: Corner of Santa Monica Blvd. and the 405 Fwy.
New York City
Location: 45 E. 49th Street, between Madison and Park Avenues.
New York City
Location: 968 3rd Ave, at 58th St.
St. Cloud
Location: 30 7th Avenue South
Honolulu
Location: 1958 Kalakaua Ave.
Philadelphia
Location: Corner of 17th and Walnut Streets.
Wilmington
Location: 802 Delaware Ave.
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