Telecheck Services: Benefits and Downfalls
Telecheck keeps a running file on every individual who writes checks in the United States. They store the data and make it available to all Telecheck operational customers who use Telecheck in their store fronts. When a customer writes a check for products or services, the check is scanned into their system using a Check Verification System. This system is connected to a nationwide database comprised of more than 305,000 businesses that accept checks. The merchant is then able to make customized decisions regarding bad check risks.
For the merchant, the benefits may far outweigh the risks. Returned checks have always been a problem for businesses, and Telecheck significantly lowers the probability that a company will receive a bad check. This cuts down on the costs of returned checks and of merchandise that goes unpaid for. It also virtually eliminates the possibility of receiving a purely fraudulent check.
Since Telecheck is fully customizable, different merchants have varying degrees to which they will accept or reject checks. A customer who has written two bad checks in a thirty-year period may be accepted by one merchant but rejected by another. This allows the merchant to determine how stringent their review process will be. One downfall, however, is that merchants stand to lose customers who are declined for payment and build a grudge against the store.
For the customer, there are several downfalls that, in some cases, far outweigh the benefits. Telecheck is based on a database which may or may not contain data about a specific individual, and with identity theft becoming more and more of a problem, customers find themselves declined for check payment based on data beyond their control.
Here are some of the issues that Telecheck raises for the average consumer:
1. Insufficient Data. Many customers have never used checks before, or have gone quite a while paying with credit cards and cash rather than checks. If they attempt to pay with a check at a store that uses Telecheck, they may be declined for payment even though they have no negative history. This is very much like a credit check in that no history is almost as bad as negative history.
2. Specific Checks. Some checks scan through the Telecheck much easier than others. I ran into this problem a few days ago. I was at a local bookstore and I’d spent nearly an hour choosing $50.00 worth of books. I went to the counter and, since I’d left my debit card at home, wrote a check for the amount on my business account. The clerk ran my check through the Telecheck system, and handed me a slip of paper that said my check could not be accepted at POS at that time. I was furious. There were more than sufficient funds in my account, and I felt humiliated.
3. Time. People are always short on time. They run into a store, expecting to spend five minutes picking up a couple of things, and fail to leave the store before thirty minutes have passed. They get to the counter, harried and needing to hurry, and their check is declined. As with myself in #2, customers get angry when their time is wasted and they have to go home to get a credit card or cash before making a purchase.
4. Humiliation. There is nothing worse than standing in line to pay for purchases only to find out that “your check is no good”. Even though I’ve never written a bad check in my life, and my credit score is well into the 700’s, and my bank account balance was more than $4,000, I was still unable to pay for a few books. The people behind me were staring in wonder, and I felt like a convicted fellon trying to secure a job as a security guard.
I think that Telecheck would be made easier for everyone if merchants posted signs advertising that they only accept Telecheck. If that were true, I would avoid those stores like the plague because I never want to be declined for payment again. I fully support the “weeding out” of people who write back checks, but when it affects the ability for upstanding citizens to make purchases, things have gone a little too far.
Telecheck itself, however, tries to make up for these problems on their website. If you’ve had a check declined by a merchant who uses Telecheck, you can use the contact information listed below to make an inquiry about the transaction and to update Telecheck’s files. This, at least, is one way that consumers can minimize the probability that their check will be declined. The system is not perfect, however, and mistakes do happen.
If you plan to shop at a store that accepts only Telecheck, be sure that you have an alternate form of payment with you. Make sure that you only write checks for which you have the appropriate funds so that Telecheck doesn’t have a negative file on you, and call the 1-800 number if you are ever declined for payment.
Contact Information
Telecheck Services, Inc
5251 Westheimer
Houston, Texas 77056
1.800.366.2425 (Declined Check Information)
When you call Telecheck, make sure that you have your driver license, your checkbook and your transaction number ready, if applicable. You can also call that same number to learn about the information Telecheck has in their file.
