What exactly constitutes "Account Abuse"

[NJD123]

My brother is still in college and can't get a checking account now due to an issue from Citizen's bank. I told him to request his chex report and it says "Account Abuse". What really makes account abuse? He doesn't dispute that he overdrafted, but would he be able to dispute and just get it changed to NSF or something?

 

According to him and his bank statement, he had an automatic draft coming out of his account for car insurance. He never had paper checks and used his bank card mostly for little purchases around campus like fast food. There were several small purchases totaling around 40$ that were pending in his account when the electronic draft came out for his insurance, even though the purchases were all made before the draft. The first of those little purchases became current the next day and over-drafted the account by a couple bucks, which generated a NSF fee, and was then followed by all the other pending charges which all generated their own NSF fee. The total amount he would have been overdrafted not including fees was under 40$. The account was closed with a negitive of almost 500$. He's made payments since but is only half-way through it.

 

It seems clear to me that there was no intentional "abuse". Is this something he can change through dispute?

[RicInAz]

Using your debit card knowing that gas stations authorize 1.00 and let you pump up to 100.00 i think, or maybe writing checks and the bank actually paying them and you not depositing the money or anything that might not be "fraud" type

[mca]

**NOTE: Chexsystems allows the vague " FRAUD" "NSF" and "ABUSE" flags because they are harder to dispute and remove. There are no clear standards for what is considered NSF or ABUSE. They can mean anything a bank wants them to.

 

What proof do they have to flag an account FRAUD , NSF or ABUSE?

 

the following information is the same for account abuse. ..it means whatever the reporting bank wants it to mean at the time

 

 

 

And since more and more banks are reporting people to chexsystems

for " fraud " or " suspected fraud " yet another vague Chexsystems entry indicator. "Fraud" means whatever the reporting bank wants it to at the time. Here are some recent examples that have been reported as "fraud" with different banks:

 

1) Elderly person falls victim to a pigeon drop scheme and deposits a phony money order in her account for $5,000. This individual is 84 and has maintained the account in good standing for over 25 years without a single overdraft. Her account is closed and she is reported to Chexsystems for "fraud", causing her monthly Social Security payment to be returned. What was aggravating is that she also had an investment account at the bank with over $11,000 in it. (Well Fargo)

 

2) An employment dispute caused the account holder's employer to issue a stop payment on a payroll check, resulting in over 400 of NSF charges. The account is closed and reported to Chex as fraud. (Compass Bank)

 

3) Small auto dealer sells a car, depositing a cashier's check for $6500. At the time of the deposit, he asks for $1000 back in cash. The dealer has owned the business for 22 years, and keeps a large average balance in the account. Because the cashier's check was a forgery, he is arrested on the spot, the account is closed and reported to Chex as fraud. (Chase Bank - formerly Bank One)

 

If you have been reported to Chexsystems for fraud, but you did not commit an illegal act, then I say make them prove and justify it. DISPUTE !

 

It was later determined that these individuals were victims themselves and no charges were filed. In the case of the stop payment, the individual has hired an attorney. The employer may have violated state law for refusing sales commission payments. All three are still trying to get the fraud entries removed from Chexsystems.

[mca]

oooops I forgot to ask, where does he live?

[marbol]

**NOTE: Chexsystems allows the vague " FRAUD" "NSF" and "ABUSE" flags because they are harder to dispute and remove. There are no clear standards for what is considered NSF or ABUSE. They can mean anything a bank wants them to.

[...]

If you have been reported to Chexsystems for fraud, but you did not commit an illegal act, then I say make them prove and justify it. DISPUTE !

 

It was later determined that these individuals were victims themselves and no charges were filed. In the case of the stop payment, the individual has hired an attorney. The employer may have violated state law for refusing sales commission payments. All three are still trying to get the fraud entries removed from Chexsystems.

 

I will dispute my "Account Abuse" entry. I called the bank today on the phone, and they claim they will leave it as it stands on Chex. So if Check sends it back to me as verified, I'll ask them for proof. If no "Proof" of "Abuse" comes back, I'll be filing a lawsuit. I want them to be able to prove their defamatory remarks.

 

It's a shame I have to do this. But if I do, I'll be asking for some money for punitive damages as well.