Tom Campbell, 57, is a retired bus mechanic who lives in Minneapolis. To get control of his spending, Campbell decided to put away the credit card and take out his long-neglected checkbook. He recently paid a visit to Southtown Center in Bloomington to buy a wedding present, an $80 place setting. When he wrote out his check at a prominent retailer, the clerk put it through the little scanning device linked to the vast computers of a company called Certegy. The machine spit the check out. Rejected.

Situations like that always make me feel nervous. The few times in my life that a clerk has rejected my method of payment, I expected to leave the store in handcuffs.

Campbell knew he had enough money in the bank. So he went to another retailer where the bride and groom were also registered. Once again, the machine refused his check. He tried to get the clerk to explain what was going on, but it was clear she didn’t know. He talked to someone on the phone at Certegy, who said he could fill out an application. Finally he paid by credit card, and called Whistleblower.

“If they accept checks, there shouldn’t be a bunch of barriers,” Campbell said. “It shouldn’t be a secret that they have this check protection company.”

Certegy is part of a company called Fidelity National Information Services, based in Jacksonville, Florida. On Thursday, I spoke with Chip Funk, Certegy’s affable vice president of contact center services. Funk told me he didn’t know the specifics of Campbell’s transactions, but figured he knew what was going on.

The days are long gone when merchants checked on a check by contacting the issuing bank. Instead, Certegy and other companies, most notably TeleCheck, maintain vast databases similar to credit reporting companies, except the data they maintain are a consumer’s checkwriting history, Funk told me. It has formulas that use that information, as well as the specifics of the transaction, to decide on a yea or nay for a check.

“If a consumer very rarely writes a check… if we haven’t seen a whole lot of history with him, and all of a sudden we see him writing a couple of checks, then we may decline to approve them,” Funk said. Unlike a credit card company, which often calls a cardholder if it sees some suspicious transactions, Certegy often doesn’t have much personal information about the checkwriter.

“Unfortunately in this day and age, there’s far too much check fraud going on,” he said. “We’re trying to help the retailer. At the same time, we’re trying to protect consumers. It’s a difficult situation to be in. We decline very few checks. From time to time, we know we’ll decline checks every now and then that might be good. We get paid by approving checks, not declining them. We hope we’re making good decisions. We aren’t perfect.”

Fortunately, in the same way that consumers have a right to their credit histories, they have a right to their histories with check-verification companies. Funk said Campbell or anyone else can request their FACT report, as it’s known, by sending the company an email (consumer.inquire@fnis.com) or calling the company toll-free at (866) 543-6315. It typically includes transactions from the previous 13 months. Checkwriters who find their checks improperly rejected can also fill out a credit card-style application, or apply over the phone, to enable them to get their future checks approved. The application is free.

Now that Campbell has received a crash course in the world of check verification, he wishes merchants and customer services reps would get more acquainted with it.

“The general public, I doubt they know this routine,” he said. As for the clerks he dealt with, “these poor kids never saw a paper check.”

The shorter print version of the story has generated a robust discussion. So I guess paper checks aren’t dead, after all.

This entry was posted on Friday, July 31st, 2009 at 2:34 pm and is filed under Buyer beware, Complaint sagas. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.