Imagine you have browsed all the aisles in a store, you are done with your purchases, and it is time to pay. When you reach the cash register, your items are scanned, and when you give the cashier a check, they look at you and tell you the dreaded words: your check has been denied. It is an alarming situation for both the customer and the seller; the former fears they may have run out of money while the latter senses a potential fraud.
With cybercriminals running rampant, a safe system needs to be in a place that can cater to both parties and allow them valid transactions. This is where the TeleCheck system makes a grand entrance. However, the big question is what is TeleCheck? Moreover, why is it rejecting your check when you know you have enough funds? Worry not as we describe to you all you need to know about TeleCheck. Read on as we break down all of its components and working system.
TeleCheck is a consumer-reporting agency that focuses primarily on customer information on checks and accounts. It is a pioneer check processing system that merchandisers can utilize to deduce how risky it is to accept a cheque and decide on the spot if they will approve it as payment. If the TeleCheck system authorizes a check, the seller is ensured that they will get the amount without any chances of fraud. Similarly, if a check goes through successfully, it provides the check owner that their records are clear and their account is safe.
This service helps many vendors when it comes to evaluating payments through check. It aids in scrutinizing and avoiding any fraudulent activity. There are many banks and financial institutions that opt for TeleCheck to deduce whether or not they should permit a customer to open a checking account.
When a check runs through the TeleCheck system, it uses the information to discern how uncertain it would be for the trader to accept your check. TeleCheck bases this assumption by utilizing its database tools and risk evaluating model system, and it also employs a system that allows merchants electronic check acceptance. Here is a little more information on how these processes work.
TeleCheck structures and maintains a database of information gathered from checks, bank accounts, and debt records. Electronic check processing encompasses debt verification that seeks outstanding debt information about a check writer. The system evaluates the data to observe patterns, recognizes and avoids forgery, and formulates statistical profiles of valid and invalid transactions. TeleCheck utilizes the information examined in this database process to convey the risk level to traders.
TeleCheck employs its risk model system to create acceptance recommendations for checks that await confirmation by traders. A trader provides data from the check and the check writer to TeleCheck either manually or electronically. TeleCheck then scans the information against its transaction database to look for matches that entail overdue payments or other account issues such as prior flagged transactions and such.
The risk model specifies traits of hoax and other suspicious factors and establishes a limit of applicable risk. The system marks any transactions that fall below the designated threshold and conveys a rating of three to the trader. The rating warns the merchant that the level of risk is substantial. TeleCheck does not tell if the check is good or if the check writer's bank account has enough funds because it does not have access to that information. It only looks for suspicious activity and works with that.
To ensure merchants different levels of verification and coverage, TeleCheck offers electronic check acceptance, too. The company's various check solution products are tailored to fulfil the needs of traders, including those who need the automatic transmission of checks. TeleCheck converts paper checks to electronic payment for merchants to guarantee safe and valid transactions.
The electronic check acceptance service compels customers to submit a signed paper check to the clerk to verify the amount and banking information. After confirmation, TeleCheck passes the acceptance of the check. The customer then signs an electronic transaction receipt for the trader and obtains a copy for their records. The authorization of an electronic check takes as long as a paper check and emerges on the customer's bank statement as an electronic transaction.
Every time a transaction goes through TeleCheck, the system will always show a code that has an implication and meaning for the fate of the transaction. These codes specify what type of reason could be causing this rejection. Here is a list of these codes and their implications in the majority of TeleCheck systems:
If the TeleCheck system refuses your check, that does not mean that you lack money in your account, it could mean they could not find enough information in their database to decide whether your check should get approval. It could also imply you have unpaid debt that has been marked into the TeleCheck system. This debt could be owed to anyone who uses TeleCheck and can usually stay on record for seven years. Outstanding debt is one of the major reasons for check rejection as check owners tend to ignore dues, and they pile up and cross the allowed limit.
If a consumer's account was marked to be a victim of fraud previously, TeleCheck has this on record. Even if the case was reported to the bank and resolved, TeleCheck may still flag your account to be high-risk months or years after a fraud event.
This is Code 4, where a consumer who has a history with TeleCheck will most likely face a denied transaction through merchants even if the debt was paid and settled.
This is a Code 3 situation and if it means that TeleCheck does not have enough information on a checking account holder. Such a situation makes it rather difficult for the company to foretell if a check is valid or fraudulent.
The person operating the system may have entered wrong info onto the Telecheck system resulting in error; this can always be a safe case.
Eventually, it is up to the trader to accept your check or not; TeleCheck is solely there as a way to assist the merchant in determining how risky it may be to take your check.
In case of check rejection at a retailer, you will receive a seven-digit record number by the TeleCheck system. You can call TeleCheck directly for additional details about that particular rejection by providing your record number.
If you are skeptical that there might be a mistake in the TeleCheck database, you can ask for a copy of your TeleCheck report. By law, TeleCheck is bound to give your report free of charge once a year upon request. You must carefully analyze your report and ask questions regarding anything that may seem a little off or is entirely unfamiliar to you. It is always better to inquire in such situations rather than have it become some severe issue because most of the time, it could only be a systematic error.
While TeleCheck may be a lifesaver for merchants, it has equal importance for check owners in keeping them abreast of their accounts. The system can help you identify any suspicious activity and save you from identity theft or serious financial damages. You can always contact TeleCheck on their helpline numbers for your queries and issues. With the constant advancement of technology, electronic financial crimes have increased, and this check processing system staves off danger considerably.