ChexSystems "account abuse" for MSing on the bank's CC?

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I was denied for a credit union membership this week, and the reason is a cryptic "9992 Debit Policy Rule Exclusion".  From what I can dig up online, that's from ChexSystems, and Chex was in fact pulled according to the denial.  My free Chex report is on the way via snail mail, but I already have a strong suspicion what this is all about:

At another credit union last month, my accounts were closed due to "account abuse".  That's what the letter said, but using the word "abuse" in a letter is far different from reporting "abuse" to Chex.  The credit union had overly generous flat-fees for debit card payments (and no-fee cash advances) and I was certainly taking advantage of those, making large payments on their credit card repeatedly.  I fully understand them closing my credit card account, and even the checking account just because they were pissy.

But the checking account was in no way involved with any of this.  So I'm not understanding how they can report abuse of the checking account to Chex and tag me for 5 years.  To be honest I don't even think this rises to the level of Chex-reported "abuse" at all, as I thought that was more for overdrafting your account and skipping town or something of that nature.  The account was always in good standing and I was playing by the rules THEY created.

Is this normal?  I plan to file a CFPB complaint anyway, if for no other reason than to generate paperwork for the credit union involved... but does it sound like a legit complaint?  And should I file a dispute with Chex before or after the CFPB complaint is closed?

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PBCole (Aug. 10, 2016 @ 2:31p) |

and maybe if you had read any of the thread you would have seen that the OP was wrong about it being anything to do with... (more)

Mickie3 (Aug. 10, 2016 @ 5:44p) |

YES!

shitrus (Aug. 17, 2016 @ 8:36a) |

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Kindly explain with dollar-amounts: what were you regularly performing(?)

SinglePapa: I was paying off the credit card to the tune of $3-5k each payment, about 4 times a week. Excessive, sure, and I paid them lots of $$ in fees for the privilege. But again this was on the _credit_ card which had absolutely nothing to do with the checking account. As far as I know, ChexSystems isn't in the business of keeping tabs on credit card points abusers.

The funny thing is, the credit union was "nice" and reported the CC as "closed by consumer" rather than by issuer. But I think their cards are serviced by a 3rd party so that might be why.  Oh and they gave me a huge credit limit increase the day before they canned me, along with a nice letter thanking me for how well I was maintaining my credit card account.  Fun stuff.

This is part of the MS game. You are right in a way. Your ChexSystem report shouldn't have been tainted as you did nothing wrong. After you get your ChexSystem report, if there is wrong info in there, you should be able to fight it.

Maybe you should wait and see what the problem actually is....

What was the name of the CU you used before?

And I still don't understand... and I'm a pretty seasoned MSer. You were using your CU debit card to pay your CU credit card? How does that generate any points/miles?

vnuts21 said:   And I still don't understand... and I'm a pretty seasoned MSer. You were using your CU debit card to pay your CU credit card? How does that generate any points/miles?
 

No, I don't have a debit card for the CU in question.  I was paying the CU credit card with a 1% points-earning debit card from another institution.  At one point the CU even allowed you to use certain credit cards for payment (quite unintentionally) because their system is coded so poorly.  So again, the checking account had nothing to do with it as there was no debit card there.  Well I guess I did send the cash advances to that checking account, but if sending deposits to a deposit account is "abuse"... heh enough said.

noelandres said:   This is part of the MS game. You are right in a way. Your ChexSystem report shouldn't have been tainted as you did nothing wrong. After you get your ChexSystem report, if there is wrong info in there, you should be able to fight it.
Yeah, unless there is more to the story, I am not sure how they could report your activity as account abuse. I know that AA seems like a generic term, but I wouldn't use that reason unless the customer was doing something that caused the bank to take a loss or illegal activities that could result in a loss. MS, while not illegal per se, does raise a ton of red flags for account activity that may influence some FIs to close an account, but to report it to Chex seems egregious.   

Oh, and "9992 Debit Policy Rule Exclusion" is not a Chex term.

Drew510 said:   I wouldn't use that reason unless the customer was doing something that caused the bank to take a loss
 

The credit union undoubtedly was taking a loss, because their cheap fees were too low to cover the interchange fees on very large payments.  But they set those fees and they chose not to have a maximum limit on debit card payments.  But hey, every 3%+ credit card I carry is taking a loss on me just from normal category spend (and no 1% spend from me on those cards)... I would never expect to be reported to Chex for that, so I don't know that taking a loss is a good litmus test for account abuse.  Lots of folks would be on Chex if that was the case!
Drew510 said:   Oh, and "9992 Debit Policy Rule Exclusion" is not a Chex term.
 

I got that secondhand, and now don't remember my source, so I'll take your word for it.  Thanks.  As I recall it was a financial institution that was discussing it and they were a Chex subscriber.... something about they were paying extra for some API of some sort and that's where the code came from.  That's all I remember.  So that cryptic phrase could come from software that was designed to interface with Chex rather than it coming from Chex itself.  My denial letter says my score is "0000", for what it's worth.

And yes, I should have probably waited for my paper Chex report before starting this thread, but I don't know what else it could be besides what I mentioned above.  I do monitor everything very closely.  It's possible someone stole my ID for a bank account just in the last 2-3 months without anything showing up at the big 3 CRAs, but c'mon, what's more likely:  Sudden ID theft, or that this is related to a known closure of my previous CU accounts just last month due to account abuse?  Just makes sense to me, Occam's razor and all that.

So you were making large cash deposits in the checking followed by large outgoing transfers (the payments)?  That would throw up red flags all over the place.  Their systems may not have even seen the cash advance part of it, so all they saw was large cash deposits.

soxfan1 said:   So you were making large cash deposits in the checking followed by large outgoing transfers (the payments)?  That would throw up red flags all over the place.  Their systems may not have even seen the cash advance part of it, so all they saw was large cash deposits.
  In that case, it should be the IRS knocking at the door, not Chex.

Well "cash" as in funds transfers, yes, but we're not talking about paper currency deposits nor money orders. Red flags are understandable. Reporting someone to Chex for account abuse under these circumstances (the topic of this thread) is not so understandable.

I wouldn't mind the IRS knocking on my door. It would take someone mere minutes to examine my statements and realize exactly what I was doing.

I see your frustration OP. The bank has every reason to close your accounts based on suspicious or large and frequent transaction activity but they really shouldn't have reported abuse to Chex. If anything, they should have brought their concern to the IRS.

While some of us abuse the heck out of credit cards, we understand the risk of having one or multiple accounts closed and having a bad relationship with a particular issuer. This is a good example warning against using bank accounts to make multiple or large frequent transactions. At worst, it could be investigated as structuring or come up on the radar as potential terrorist or criminal funding activity. Transferring or funding 4x per week to the amount of $3000 each could certainly be walking along the line of structuring if they can prove intent to keep transfers under the IRS maximum $10k transfers for filing a report. This being a mark on your Chex report won't likely get you in trouble with feds but is none-the-less a huge pain that can shut your banking applications down for years to come.

I would wait to get the Chex report and kindly contact them explaining the situation and request this item be removed from your record. I have heard Chex can be difficult to deal with so I would tread lightly to start.

Good luck and please keep us updated!

When did the IRS maximum get reduced to $5k?

My mistake. I meant $10k. Changed my post.

I suspect the 9992 is a code from an add-on program Chex offers - Qualifile. Your Chex score should be a three digit number, similar to a credit score. Somewhat similar range of values, as I recall. The four digit Qualifile numbers are codes that describe your DDA account history, profitability for the FI (or maybe expected profitability), negative items, etc.

How many DDA accounts have you opened in the past year? Some FIs get wonky about lots of apps. This shows up as a drop in your Chex score AND as a code from Qualifile. So the FI that turned you down might not have liked:

  • How many accounts you've opened recently
  • Your Chex score
  • Your Qualifile codes 

My experience is that you will likely never really know.  Many CSRs will tell you X, Y or Z, but not really know.  

Finally, if you really want to get in to the new FI, I've had luck doing an in-branch app.  Maybe the process is different from on line?  Maybe the CSR doesn't want to turn you down in person?  I don't know. 

DTASFAB said:   When did the IRS maximum get reduced to $5k?
  When did transfers of any amount start requiring reporting?

Glitch99 said:   
DTASFAB said:   When did the IRS maximum get reduced to $5k?
  When did transfers of any amount start requiring reporting?

  Never.

I feel like we need more CONSUMER-friendly credit unions, or maybe just some more MS friendly ones.

My Chex report showed up. False alarm, so now I feel rather silly for getting all bent out of shape about this. Chex report showed no derog information at all.

The CU that denied me was Boeing credit union (BECU). I only wanted the account for the 2% interest (and the snazzy debit card) since I've maxed out all the 3-5% CUs that I could find. For what it's worth, I can't even understand the high APY sticky thread here, as the first page doesn't list anything above like 2.55% APY and there are tons way better than those. (??) No big loss, I'll find another CU to stick the excess cash in.

Why the BECU denial showed a 0000 score is beyond me. I see I have a fair number of Chex inquiries, but surely that would still toss back a score of some sort? 3 inqs in last 6 months, 4 in last year, 10 inqs in the last 2 years. Yeah, I can see where some conservative CUs might think that's excessive.

Oh well, it was still an interesting discussion. And here I was getting all excited for a big hoe-down.

Corndogg said:    IRS maximum $10k transfers for filing a report.
  
As long as the initial discussion post has been settled, we can get pedantic about this!

The Currency Transaction Report (CTR) and associated $10k threshold has nothing to do with the IRS. The report is a function of the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) and the amount is set by Congress. More info: https://en.wikipedia.org/wiki/Currency_transaction_report


irate_retro said:   The CU that denied me was Boeing credit union (BECU). I only wanted the account for the 2% interest (and the snazzy debit card) since I've maxed out all the 3-5% CUs that I could find. For what it's worth, I can't even understand the high APY sticky thread here, as the first page doesn't list anything above like 2.55% APY and there are tons way better than those. (??) No big loss, I'll find another CU to stick the excess cash in.
  If you find better ones, add them.  That's the point of the forum, group contributions.  That particular thread has only 2 stipulations:  Nationally Available (not just 1 city/state, etc) and no "Rewards Checking" hoops like debit transactions every month, signing into the account, etc.

There's a separate "Rewards Checking" thread that's also stickied, that covers the "super-low balance limits with X number of jobs you need to do every month to earn your $10" accounts.

Edit: I am sorry I stated incorrect information.  It has only one stipulation on that first thread: Nationally available.  There is a separate section near the end of the Quick Summary with Reward Checking accounts. I'd assume most people are just adding new ones to the separate thread dedicated to that specific purpose, though.

Bend3r said:    That particular thread has only 2 stipulations:  Nationally Available (not just 1 city/state, etc) and no "Rewards Checking" hoops like debit transactions every month, signing into the account, etc.
 

  
Ah, that explains it.  I missed the part about no "Rewards Checking" accounts allowed.  I don't mind all the hoops as long as Amazon reloads at $0.50 survive.  Of course it was better in the $0.15 days, but this is still no trouble at all after some automation is employed.

I did see a second thread with some rewards checking accounts but when it was missing some very well known 4.5 - 5.0% accounts I guess I thought I was in the wrong place.  Maybe those "missing" ones are buried in later pages.  I will give it another look.


Chexsystems Help - CreditBoards
Disclaimer
If you are looking for a checking or savings account, visit the Creditboards Chexsystems forum:
https://creditboards.com/forums/index.php?s=37ba2d066cab5d18950f...

PBCole said:   If you are looking for a checking or savings account, visit the Creditboards Chexsystems forum:
https://creditboards.com/forums/index.php?s=37ba2d066cab5d18950f2475d2c5b22f&showforum=75

  

and maybe if you had read any of the thread you would have seen that the OP was wrong about it being anything to do with CS.


 

DTASFAB said:   
soxfan1 said:   So you were making large cash deposits in the checking followed by large outgoing transfers (the payments)? That would throw up red flags all over the place. Their systems may not have even seen the cash advance part of it, so all they saw was large cash deposits.
In that case, it should be the IRS knocking at the door, not Chex.


FinCEN, not the IRS
irate_retro said:   Well "cash" as in funds transfers, yes, but we're not talking about paper currency deposits nor money orders. Red flags are understandable. Reporting someone to Chex for account abuse under these circumstances (the topic of this thread) is not so understandable.

I wouldn't mind the IRS knocking on my door. It would take someone mere minutes to examine my statements and realize exactly what I was doing.


FinCEN, not the IRS
Corndogg said:   I see your frustration OP. The bank has every reason to close your accounts based on suspicious or large and frequent transaction activity but they really shouldn't have reported abuse to Chex. If anything, they should have brought their concern to the IRS.

While some of us abuse the heck out of credit cards, we understand the risk of having one or multiple accounts closed and having a bad relationship with a particular issuer. This is a good example warning against using bank accounts to make multiple or large frequent transactions. At worst, it could be investigated as structuring or come up on the radar as potential terrorist or criminal funding activity. Transferring or funding 4x per week to the amount of $3000 each could certainly be walking along the line of structuring if they can prove intent to keep transfers under the IRS maximum $10k transfers for filing a report. This being a mark on your Chex report won't likely get you in trouble with feds but is none-the-less a huge pain that can shut your banking applications down for years to come.

I would wait to get the Chex report and kindly contact them explaining the situation and request this item be removed from your record. I have heard Chex can be difficult to deal with so I would tread lightly to start.

Good luck and please keep us updated!


FinCEN, not the IRS
DTASFAB said:   When did the IRS maximum get reduced to $5k?

FinCEN, not the IRS
Corndogg said:   My mistake. I meant $10k. Changed my post.

FinCEN, not the IRS
Glitch99 said:   
DTASFAB said:   When did the IRS maximum get reduced to $5k?
When did transfers of any amount start requiring reporting?


They don't.
doveroftke said:   
Corndogg said:    IRS maximum $10k transfers for filing a report.
  
As long as the initial discussion post has been settled, we can get pedantic about this!

The Currency Transaction Report (CTR) and associated $10k threshold has nothing to do with the IRS. The report is a function of the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) and the amount is set by Congress. More info: https://en.wikipedia.org/wiki/Currency_transaction_report


YES!



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