Banking Sometimes Means Having to Say You’re Sorry

Posted by on September 25, 2010 in Customer Questions, Empower Yourself, PerkStreet Posts

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so_sorryRecently, we invited Nick from Step Away From the Mall to open a PerkStreet account and blog honestly about his experience. In exchange for his feedback, we offered to make a donation to the Financial Literacy Foundation in his name.  Nick gave us his feedback; sadly, it was that he couldn’t open an account with us.

Nick explained on his blog that it was due to “an unsatisfactory report from ChexSystems, a consumer reporting agency.” He raised some good questions: what is ChexSystems? What information do they have and to whom do they give it? How can a guy with a great credit score be denied a checking account?

ChexSystems is a service that provides information about banking behavior to financial institutions. Similar to a credit report, any banking activity, including bank inquiries and account opens, are reported to ChexSystems. Red flags on a ChexSystems report are often things like:

  • Frequent overdrafts
  • Abandoned checking accounts
  • Many account opens or inquiries in a short period of time

This speaks a lot to Jason’s blog posts last week about bank fraud, and how much it stinks that the measures used to weed out scammers and fraudsters also sometimes keep out good potential customers. These kinds of situations don’t always indicate someone trying to pull a fast one on a bank, but most banks err on the side of caution. In the end, fraud costs the consumer and it’s in the best interest of everyone to be cautious.

Nick, we’re sorry this diminished some of your excitement about PerkStreet and made you feel lousy. We are making that donation in your name to the Financial Literacy Fund, and we will continue to read your blog because we think what you’re doing is really awesome.

If you’ve been turned down for a checking account, you can order a copy of your ChexSystems report.  The ChexSystems site also has really helpful information about how to handle identity theft and tips on how to avoid common mistakes with checking.

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  • Joel VanderHoek

    So, did you end up granting him an account? Is the ChexSystems report always the final word based on their info and algorithm, or can an application be assessed by a Perkstreet employee upon appeal? I had the same issue, and unfortunately have not been able to open an account yet, though I’m practically an evangelist for Perkstreet telling everyone I know about you. I’ve been in communication with Dan O’Malley in the past, but my hunch is that he’s a bit busy these days to deal with these issues directly :)

  • http://www.stepawayfromthemall.com/ Nick

    oops – forgot to write the security code and my comment is gone!

    @joel Here’s the short version: The answer is “no” – no account. But that’s OK – I still like perkstreet and especially JS. And I think rewards checking can help a lot of people avoid a ton of credit card debt.

    Oh – and check out stepawayfromthemall tomorrow morning when I’ll reveal what’s on my ChexSystems report that was cited as the reason I was declined. I bet you’ll NEVER guess.

    And thanks for checking out the blog JS. I like writing – especially when I know people are reading :)

    Nick

  • Joel VanderHoek

    Nick, thanks for your reply. Makes sense, and I’ll check out your site tomorrow morning – should be interesting (my guess: too many checking account inquiries in a short period). And you’re right, JS and the Perkstreet team are awesome. I’ve gotten them 2 new customers even since my application didn’t go through. I am still hopeful though, that they can find a way to issue accounts based on more than just the ChexSystems report.

  • Jacob

    Hmm, if a bank relies only on automation to determine what’s right and wrong, then maybe I don’t want to bank there.

    I was declined today and make about $100K a year. It’s unfortunate Perk Street did not at least email to ask about what negative occurrence has turned up in this report–perhaps there is a very reasonable answer.

    But if this bank doesn’t want my money, someone else will…

  • Brendan Carroll

    Hi Jacob,

    I work for PerkStreet and am sorry you were declined. We receive thousands of applications and cannot manually go through each one. We use ChexSystems which verifies your previous banking history when considering to open an account or not. If you feel your ChexSystems report was inaccurate I encourage you to dispute it with them and re-apply.

    If you would like to take this conversation offline please feel free to email me at Brendan(At)Perkstreet.com.

    Best Regards,
    Brendan

    Customer Advocate Manager
    PerkStreet Financial

  • Kitkat6563

    If you are declined an account based on Chexsystems do you get your deposit back?  If so, ho wlong does it take?  I don’t want to get screwed out of my money.  They are misleading in their advertisement about getting an account.  I will stay with my current debit card account that I have been with for more than 5 years and love.  They have been great to me AND it keeps me aways from the thieves at the banks that want to charge for everything.

  • http://Twitter.com/KylePs80 Kyle Psaty

    Hey Kitkat, 
    In the unfortunate event that you’re declined for an account, you will absolutely be refunded for your deposit. It’s not an application fee; it’s your money. And we’ll make sure we get it back to you. This can take up to 10 days. Generally speaking, we cancel the transaction immediately upon declining the account, and then the institution you used to fund the PerkStreet account simply needs to credit you with a refund. 

    -Kyle 

    Kyle Psaty
    PerkStreet Financial 

  • Chris C.

    I’ve been a TD Bank customer for many years and Make 53K a year. I applied and got denied an account because of Chexsystems. I had an account like four years ago I closed but I never really closed at Citizens and they charged me 200 in Fee’s. I refuse to pay a fee that was charged because of a Maintenance Fee. Too Bad I was ready to switch all my TD accounts. PerkStreets loss. 

  • Anonymous

    Hi Chris,

    We’re sorry to hear this and I apologize that we cannot extend you an account at this time. As is standard, if you’re willing to take action to correct the negative line item on your ChexSystems report, we’d love to have you re-apply for an account with PerkStreet. If you’d like to discuss specifics, please feel free to email our Customer Advocacy team at help-@-perkstreet.com

    Lily
    PerkStreet Financial

  • Ivxum22

    Jacob, couldn’t agree with you more. These guys will lose money and customers because they dont think outside the box. I just got relocated to New York for work (so obviously have many new accounts opened recently. My household income is more than 250k, no late payments ever, mortgage in Florida paid off despite the house being underwater…and I got declined for a CHECKING account!

  • Ivxum22

    Jacob, couldn’t agree with you more. These guys will lose money and customers because they dont think outside the box. I just got relocated to New York for work (so obviously have many new accounts opened recently. My household income is more than 250k, no late payments ever, mortgage in Florida paid off despite the house being underwater…and I got declined for a CHECKING account!

  • Tom6690766

    BS Brendan! It is that kind of thinking that has led us to this point with having a stupid and inept system like chexsystems! I have over 30 accounts in my life until 1!!!!!!!!!!!!!That’s right 1 mistake with a very small account I forgot I was using went in the negative. For that small fee I am now BLACKLISTED by chexsystems. Completely and utterly studip and useless! I am not a crimianl and should not be considered up to crimianl activity because of chexsystems. That is BS! I am also a veteran and with an Honorable Discharge! Chexsystems needs to be revised and/or shut down!