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Thursday, May 8, 2014

An update to the nightmare

Last week, I mentioned a nightmare I'd been dealing with. It all started when the local grocery where I've shopped for years informed me that they could not accept my checks. Even though I'd never had a problem with my bank and there was more than sufficient funds in my accounts, TeleCheck, a company I'd never heard of before, had blocked them.

After numerous calls, we finally were told what happened. I should add that all of our calls to TeleCheck ended in frustration and no answers - until we contacted Lowe's Foods headquarters, and they phoned TeleCheck on our behalf. I suppose TeleCheck didn't care what consumers experienced, but they decided they did not want to lose Lowe's Foods' contract.

So here's what happened, and the representative from TeleCheck tells me this is completely legal and an acceptable business practice:

I have contractors work at my home on a regular basis. I might pay them for mowing my lawn, cleaning my house, or performing handyman tasks. I pay them with a check. I always have. I don't carry cash and I'm certainly not going to ask them if they will take a credit card.

If a person takes my check to a store and asks them to cash it and that store uses TeleCheck's services, the checking account number on MY check is linked with THEIR driver's license number. From that point forward, their credit is linked with mine.

Here's what that means to you: if you write a check to someone who does not have stellar credit and they cash your check at a store (versus a financial institution) YOUR credit will be associated with THEIRS if the store uses TeleCheck. Your credit can be absolutely pristine and if theirs has tanked, so will yours.

And the TeleCheck representative told me this is perfectly legal and an accepted business practice.

I can only think of one person who was a worse one to pull this stunt with, and she's now a United States Senator. So of course once I got TeleCheck's official story, I contacted her office. Since then, I've contacted another Senator, a Congressman and I filed a formal complaint with the Federal Trade Commission - who, incidentally, just fined TeleCheck $3.5M in January of 2014 for similar actions. Read the official report here, subtitled Penalty Matches FTC's Second Largest Ever in an FCRA Case.

And I'm not finished. I am also in the process of completing paperwork for the Attorney General's Office, the Better Business Bureau - and any other agency or congressional subcommittee who may have jurisdiction. Google TeleCheck and you'll see literally thousands of consumer complaints.

I've asked my Congressional representatives whether this is, in fact, legal. And if it is, they should close this loophole. No one should ever have their credit arbitrarily linked with someone else. The implications are frightening.

And of course I've seen a book in this. Stay tuned. You may be reading a suspense thriller with this scenario in it sometime in 2015!

6 comments:

maggiethom said...

Holy cow, that is unbelievably scary. I've never heard of Tele-check but it sure makes you think about paying people by cheque. Yikes. I truly hope this gets straightened out for your soon. :(

p.m.terrell said...

Thanks for stopping by and leaving a comment, Maggie! I'd never heard of them before they blocked my checking account. And I wish I still had never heard of them. :)

Bonnie Watson said...

That sounds pretty crazy to me... why would your stuff be tied to someone else's credit? Weird.

p.m.terrell said...

My thoughts exactly, Bonnie! This makes absolutely no sense whatsoever.

leonardo d. einstein said...

I read on this site:
http://www.gobankingrates.com/checking-accounts/chexsystems-vs-telecheck/

that you are entitled to a report on what these type companies have in your files, much like you are entitled to your own credit report with the credit bureaus. Note that there are two companies. In addition to Telecheck there is also ChexSystems. I knew that they created a profile of how individuals use (or misuse) their bank accounts, but I did not know that they could "freeze" an account in the manner that has been described in your blog.

p.m.terrell said...

Thanks for stopping in and leaving a comment, Leonardo! I appreciate the information and the link. I never knew these companies could have such an impact on my ability to write checks, either, until this situation occurred with me. It was truly frightening.