S. wrote a check at Kmart earlier this month and it was denied. No reason was given—just “denied.” It turns out a separate company, Certegy, made the decision, so S.—who writes, “I’ve never had a bounced check”—tried to track down someone at Certegy who could tell her what was wrong with her checks.
I’ve never heard of Certegy, until April 6. I went to K-mart to purchase some items, wrote a check (which I have done there dozens of times before), and it was declined. Huh? I mean WTH?! I’ve never had a bounced check, I have over draft protection anyways. I called the toll free number, of course it’s automated, they won’t give you a reason, the recording just said “Precautionary Measures”, sooooo, what the heck is that all about? I cashed a check elsewhere a few minutes later, just fine.
I emailed K-Mart complaining about being the embarrassment it caused me. I emailed Certegy also, all I received from both was a form letter giving me instructions how to obtain more information about my particular situation. OK, so, I requested a letter through USPS which was suppose to explain WHY my check was declined. This is the response I received (you guessed it, another form letter).
Dear Ms. XXXXX,
This letter is written in response to your inquiry regarding our recent inability to authorize your check. Initially, we want to assure you that we understand the concern this can cause, and we apologize for any inconvenience you may have experienced.
Certegy Check Service (CCS) is a check authorization service. Our clients throughout the United States utilize the service to help reduce losses incurred through retail practice of check acceptance. For many CCS clients we assume liability should an authorized check subsequently be dishonored. CCS maintains a computerized file containing both returned check information and driver’s license or checking account number. In addition to this information, over 40 years of check authorization and resulting loss experiences CCS has developed guidelines for authorizing acceptance of checks. Our system determines the potential risks associated with with checks. Many proprietary factors are evaluated and in making decisions for check approvals. We also track check writing based on many factors, including check sequence number,, check writing activity and check amounts. This process is designed to protect consumers and retailers and to prevent unauthorized individuals from writing checks on otherwise valid accounts. Unfortunately, valid check writing patterns can occasionally overlap with these patterns resulting in out inability to authorize a valid check such as yours.
Regarding our inability to authorize your check, although there were no returned checks on file, the check fell outside of approval guidelines. Unfortunately, we did not have any addtional information at the time to override the concern, and we again sincerely apologize.
In closing, we do appreciate and understand your concerns. Please contact our Customer Care Department at 800-352-5970 if we can be of further assistance.
Sincerely,
CERTEGY CHECK SERVICES, INC.
Customer Care DepartmentThe check fell outside WHAT approval guidelines? Does this scream discrimination or am I being just plain stupid?
So let’s see—according to Certegy, they use the following methods to decide whether or not Kmart should accept your check:
- they keep a “computerized file containing both returned check information and driver’s license or checking account number”
- they’ve used “over 40 years of check authorization and resulting loss experiences” to develop guidelines for authorizing checks
- some proprietary factors!!!
- some sort of pattern matching based on things like “check sequence number, check writing activity and check amounts.”
It seems the only factor that could have resulted in your rejection would be something in their “proprietary” bucket. Still, despite all of that fancy-sounding pattern matching and database tracking, they admit to false positives that impact your ability to get a check accepted at a retailer you shop at on a regular basis:
- “Regarding our inability to authorize your check, although there were no returned checks on file, the check fell outside of approval guidelines. Unfortunately, we did not have any addtional information at the time to override the concern, and we again sincerely apologize.”
It doesn’t sound like discrimination as much as incompetent “proprietary” technology. What’s surprising is how impossible it was for you to get a clear answer—even after following their instructions, you still don’t know why the check was refused and whether it will happen again.
Of course, we’re not sure why Kmart would do business with Certegy in the first place, for lax security:
Certegy Check Services Inc. disclosed last summer that a database administrator had sold the personal and financial information of 8.5 million consumers to data brokers over a five-year period. The check-processing firm didn’t nab the DBA until a retailer reported a link between check transactions and marketing solicitations that some of its customers had received.
That’s right, Certegy didn’t even catch the theft over a five-year period. A retailer did the “pattern matching” and pointed out the connection.
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@tmlfan81: When I worked in a store, I hated wen people paid with check. It was an extra 15 minutes for me on the phone to confirm that check was valid and approved. While other customers WAITED. (If it’s quiet, then check is ok, but when there several people behind you…)
And when the company finally changed policy and stopped taking payments by checks, then I’ve seen some hissy-fits from check’s customers.
The impression it left me…
I believe checks shouldn’t be used in retail at all. It costs to ”process” more than credit cards and debit cards. And the wait is RUDE to your other customers.
I currently bank though my credit union. When there is insufficient funds in my checking account to cover a check, it automatically pulls the money from my overdraw credit line. If I use the debit card without sufficient funds in checking, it gets rejected. The overdraw credit line only works with paper checks. This makes no sense, and I have argued this directly with the CEO of the credit union, to no avail. Because of this, I do need to write checks every now and again.
Wow – So you’re that annopying lady in line who keeps us all waiting while you write your check. How did you call Certegy?? Use a rotary phone?
I work for a company that provides residential services for developmentally disabled adults – ie group homes. Each house has its own checking account, and *gasp* our employees use checks. A debit card would not work – each house has at least a dozen employees and frankly we aren’t going to hand out personalized debit cards to staff. Petty cash? Ha, what a nightmare.
However, many places won’t take checks anymore. Movie theaters, many gas stations, most restaurants, etc. Then we have to ask our staff to pay with their own money and get reimbursed. And when you have people making $10 an hour, asking them to shell out $50 for an activity doesn’t go over so well. I don’t know what the heck we’re going to do when we can’t write checks anywhere, but I’m sure the day is coming. In the meantime, we’ll be the people ahead of you in line patiently and slowly explaining to the cashier the concept of a “business” check.
@newfenoix: The company I work for doesn’t cash paychecks, only accepts checks for payment. How do you know Certegy was even used in this case? If they were, maybe your employer recently bounced a few paychecks. As far as I know, Certegy only gives risk assessment on consumer checks, so I really have no idea on dealing with paychecks.
At Costco, it is cash, check or AmEx. I don’t carry credit cards, so the checkbook comes out. If the person behind me doesn’t like it, who cares.
@ideagirl: um, no. The stuck-up lady with too much make-up buying an overflowing cart of stuff at the 15 item lane never takes as little as 30 seconds, takes a long time to check over the prices before she even starts writing the check (or, sometimes, even getting out the checkbook), waits until the end to bring out her coupons, and it almost always requires a manager type coming over to do something with it. That’s just the ones without kids…
The above is something I wait on often.
One lady will take longer with one check than a Mexican immigrant family paying with three or four methods. It’s crazy. Here’s two people keeping two or more kids in check (oh, puns!), paying by food stamp, cash, and one or more debit cards, and they are done in like a minute. But, they were prepared, and their kids tend to behave. I bet if they were paying with a check, too, I wouldn’t notice an extra delay (assuming Certegy doesn’t say no
).
@StevieD: your dad is awesome.
@Dobernala: you are not at a bank. You at a retail store that has an ATM machine within walking distance that is likely to not be your bank’s, and thus, charge you a fee for its use.
@MayorBee: While you are protected for past the first $50 by federal law, if you use a credit card, that same protection isn’t there for debit cards.
Yes, banks usually don’t hold you responsible for ANY of it (my bank refunded me for $22 when a business fraudulently denied me a refund for a cancelled order, long story, but legally they didn’t have to — but will do it for longstanding customers) but it’s a lot easier to rest easy when you’re protected by the force of law.
(That, and not being out any money during fraud investigations is nice. I don’t bounce bills — only did so once in my life and that was a freak accident, also a long story — and I don’t intend to start now because some jerk helped themself to what is not theirs).
@newfenoix: Paychecks are also the target of check fraud, and they have a much bigger payoff, because they can be for larger amounts and be less suspicious. I rejected tons of them while working at a customer service counter. It’s also true that paychecks can bounce, mostly for small companies, but if a small company uses a payroll service and bounces it check, it can screw things up for everyone that uses that service.
IMHO the biggest problem with checks is they have all the information someone needs to do an ACH debit of your account, right there on the front. I’ve heard horror stories of people who had fraudulent ACH debits against their accounts and had a very hard time getting them reversed — apparently the bank assumes that if someone has your account number and routing code, they must be you.
@eelmonger: Yup. I once worked for a small company that got in financial trouble and bounced some checks. My bank started holding my paychecks until they cleared. Very annoying. I also hate the way banks charge you a “returned item fee” if a check you deposit bounces. Like it’s somehow your fault you were given a band check.
I used to work at Best Buy and they use the same service. Think of credit bureau for checks (thats the best approximation). People would come in that made 250k+ a year, theyd have titanium amex, and still their check would get declined.
Basically, if you dont regularly write large checks, any large check you write would get declined 99.9% of the time. Thered’d be nothing we could do, Cetergy was way overconservative when it came to approvals, and we lost TONS of business because people ONLY had a check with them.
I agree the system is broken, but I dont know how to fix it (that wouldn’t open up the door to MASSIVE AMOUNTS of check fraud, yea we had tons of that btw, but the ones who caught it was usually the employees and not cetergy, when we noticed the person had a fake ID which was easy to spot every time)
I know CheckSystems (the system most banks, at least here on the west coast, use) is considered a credit reporting agency.
It seems like not much of a leap to think that Certegy would also fall under that banner. If simply having a checking account is considered req credit, then it would seem likely that using that checking account would also… which means that you may be able to get Cenergy in hot water by pointing out to the Gov’t that they aren’t following Credit Bureau Reporting laws by not explaining specifically why you were rejected.
Has anyone ever called them to ask for a copy of their credit report with them?
That might be entertaining.
To all you indignant, “I can’t believe you are using a check” people
Tough.
I don’t care if you are pissed with me. Like i’m ever going to see you again in my life.
I don’t care if you have things to do. You should have shopped faster.
So stand behind me an fume. Get your blood pressure up. Go home and beat your family, i don’t care.
Doesn’t bother me at all.
To be honest I only write 5 or 6 checks a month to various entities. But I think its totally absurd that people give a rats ass what other people in line ahead of them are doing.
Oh for god’s sake, when I was a cashier, I had 50 unjust card or check denials a day. It’s usually modem error. Calm the fuck down and stop posting crap, Consumerist.
@Blackneto: Exactly. It’s nice to see Consumerist bringing out the best in people, no?
@WhirlyBird: I’ll be the one smiling when you are the one in a hurry, folks.
Common courtesy ain’t.
I was hit by that certegy info “breach.” It drove me crazy trying to figure out how this telemarketing company got my info. They’d try to tell you that you’d entered in a contest and won, and blah blah, it’s just a small fee for shipping, do you accept? And then they proceed to drain your bank account. They never got that far with me, but that’s what I read from others online. Anyway, on the upside though I used the opportunity to get the hell away from Bank of America. Initially I thought BOA might have been to blame, because I only write one check a month, to my landlord which I personally hand in at their office. I write absolutely no other checks. And this company specifically had my bank account number, which, according to the BOA fraud specialist I talked to, cannot be obtained through a debit card transaction. So I could not figure out how the hell my info was stolen for at least six months after it happened, until my landlord sent out a memo talking about how they were changing check processing companies because of this.
My husband just tried to write a $65 check at Sentry Foods and it was declined. He was given a slip of paper with Certegy’s contact info. I called Certegy immediately to find out why this happened. They were very courteous, and apologized, I will give them that. They asked for our drivers license #s and birthdays and put me on hold for maybe 2 minutes. When they got back on the phone they stated that there is no negative information on file for us and thus the check was declined for other reasons. I honestly had a hard time understanding the exact reasons, they made no sense to me. She mentioned that something about the check either alerted them of possible fraud or that we aren’t preferred check writers with Certegy (and that she could send out a form to fill out), or perhaps we should obtain overdraft insurance (mind you there was no overdraft currently or a history of),… then the word “parameters” was mentioned, but again, I was at a loss as to what that meant exactly. I just wasn’t getting a concrete answer – or a reason why we deserve to be punished when we’ve done nothing wrong (as they even admitted). I simply interrupted and stated that since we have never had a problem writing checks at Piggly Wiggly and Pick N Save, for example, that we would just simply stop shopping at Sentry.
@newfenoix:
They declined my payroll check, too. No reason at all. They honestly told me to wait two weeks and try again.