what's this Telechek thing??

Factual Questions
1

So I went to register for classes today, and discovered that my university now processes checks using something called Telechek.

Thing was, my check was rejected, meaning that I had to call a clerk at the toll-free Telechek number to figure out why. The woman on the other end asked for my name, phone, drivers license #, the number off the bottom off the check, etc. She then told me to have the finance office person run it through it again, which she did—it was accepted, but she ominously informed me that it could not be converted into an “electronic check”.

So what’s the deal with this? A check is a check–never bounced one w/my university. Had enough money in my account to cover the check. Normally I’m wary of giving out personal info over the phone, but I was pressed for time.

Also, the Telecheck chick said that I now had “established an account” with them. What’s the deal? Anyone else run into something like this? I’m a little pissed off right now.

2

I recently became aware of Telechek. Apparently they authorized acceptance of checks in the way that a credit card is approved.

My re-order of personal checks were stolen from the mail. The guy went to town forging my checks; wrote over $20,000 in a matter of days.

The merchants were using Telechek to authorize the checks before they accepted them. I found out about the check fraud almost immediately and my bank froze my account.

Telechek happily authorized my stolen checks for the next two weeks.

I was like: “Who the fuck is Telechek and why are they okaying my checks when the bank has frozen the account?”

Apparently, all Telechek did was to check my credit rating, and since it was in good standing, they decided to tell merchants it was OK to take my checks–even though I wasn’t writing them.

They never communicated with my bank. If Telechek declined to authorize your check, maybe you have credit problems.

3

[shrug] I haven’t encountered it myself, but here’s their home page.

http://www.telecheck.com/home/home.html

Sounds like “risk management” is the key phrase here. Sounds like you encountered the “TeleCheck Electronic Check Acceptance® Service”.

http://www.telecheck.com/products/eca.html

4

My company did some discussions with Telecheck, but we never actually hired them. They are a big check approval outfit, they use a bunch of data to determine whether a paper check presented is actually good, and they also can do electronic checks over the web (you type in your bank account number and bank routing & transit number and they clear the check electronically).

You said you never bounced a check at the university, but how about elsewhere? A poor record could cause Telecheck to give a bad rating to the transaction, regardless of the current state of the account.

5

Oh, yeah. I forgot to add that Telechek started sending me letters demanding payment for the bounced stolen checks that they approved–with an $30 penalty fee per check.

My only consolation is that they have to eat the loss and not the merchant (or me). It’s going to cost them a few $1000s

6

Telechek is a check-guarantee service. The vendor signs up for a fee, which can be quite large, based on the number of checks they process. The vendor is then required to gather specific information from the check writer: pre-printed checks with physical address, home & work numbers, and driver’s license number. If the check bounces and the vendor has collected the correct info, Telchek will pay the vendor the face amount of the check. Then the fun begins :smiley: Telechek will aggressively pursue the check bouncer to get their money back PLUS a fee (usually the maximum allowed by state law).

7
      • A few years back I worked at a convenience store that had a check service, I’m pretty sure it was Telecheck. What we did was, we keyed in the checking account number into a little machine, and it gave back an alpha-numeric code number we had to write on the back of the check; elsewise we couldn’t take the check. They didn’t explain much beyond that. ~ I don’t remember it ever turning down anybody, not even neighborhood people who we knew were notorious for bad checks. We asked the manager about that issue, and he said that he was told “If the machine says take it, then take it.” I never heard either way if any of the approved checks were bad or if the store was liable for any of them, but I doubt all of them were good.
        (In fairness, this was a few years ago; Telecheck might be operating differently now) - MC
8

About 20 years ago I worked for the company that provided computer services to TeleChek. I can shed some light here, but things have obviously changed over the decades. For one thing, they seem to bed able to spell “check”. I looked at the TeleCheck homepage and it’s the same logo.

I don’t understand that “established an account” business at all. Telechek didn’t used to work like that. I’m going to descibe how things worked 20 years and hope that the info is still of some use.

Telechek charged the merchant some fees. I forget exactly what they were, but it approximately went like this: There was a small per-check charge to even inquire about a check. I think it might have been about 10 cents. If TeleChek guaranteed the check, there was an additional charge of 1% of the check value. TeleChek had a limit on guarantees, I think it was $1,000. So you wrote a check for $2,000, TeleChek would only guarantee the first 1,000 and the fee would be $10, not $20.

TeleChek had several codes for a check. “Code 1” meant the check was guaranteed by TeleChek. “Code 2” usually meant that TeleChek has too many guarantees pending for the checkwriter and will not guarantee this particular check. However there is no evidence of any checks bouncing with “code 2”. “Code 3” meant that TeleChek currently possesses bounced checks from this checkwriter. The merchant is free to accept any check from any person, even if TeleChek responds “code 3”. It’s just that the merchant is assuming the risk.

If the merchant deposits a “code 1” check and it’s returned by the bank, he can send it to TeleChek. TeleChek will pay the full amount to the merchant and then attempt to extract the money from the checkwriter. The merchant can also send any “code 2” or “code 3” checks to TeleChek. TeleChek will attempt to recover the money and if they succeed, pay back the merchant.

The first thing TeleChek will do is simply to redeposit the check. If that fails, they try something called a “special collect” with the bank. Believe it or not, most bad checks can be collected this way. The checkwriter was just a little over-extended or something. But this exhausts the options of working with the bank. Now TeleChek must contact the checkwriter directly. TeleChek has its own collectors, they don’t work with “collection agencies.”

TeleChek never inquires about a checkwriter’s “credit rating”. People who have “bad credit” are people who break promises with their creditors. People who write bad checks are breaking the law. There is a lot of people with “bad credit” who never write a bad check. TeleChek also never forwards its data to credit agencies. They are competition and TeleChek’s database of folks who have written bad checks is TeleChek’s greatest asset. If the check is paid, the info is promptly removed from the database and TeleChek once again will guarantee checks from the checkwriter. And TeleChek is required by law to remove any “negative data” after 7 years.

TeleChek will “code 2” a check if the checkwriter does anything very unusual. If Bill Gates walks into a car dealer and tries to buy a car with a $25,000 check, Bill is going to get a code 2. If Bill goes around writing a lot of $100 checks, he will soon start getting “code 2”.

647, TeleChek can’t contact your bank and has no way of knowing that your account was frozen. But something went very wrong if really guaranteed $20,000 worth of checks. Even if this happened in December when everyone is writing a lot a checks, the forger should have gotten “code 2” long before hitting $20,000. You can contact TeleChek and request that they disapprove your checks, but almost no one knows that.

MC, until TeleChek owns a bounced check from a checkwriter, they are going to guarantee checks. They don’t mind doing business with merchants in bad neighborhoods. Most people who write “bad checks” eventually make them good. If some of your customers are exceptions, it’s better to find out with a $10 check at a convienence store. Your store undoubtedly displayed the TeleChek logo. Folks who write bad checks repeatedly soon learn everything about the way TeleChek operates and will only present a check to you when they know it will be approved.