Sunday, May 24, 2009




"Attempted to pay for my $104 purchase at Wal-Mart with my personal check which was declined. This account had a several thousand dollar balance. I ended up using my debit card tied to the same account and of course it was accepted."

I read the above entry at

I read several similar other complaints in many other web sites and I simply can't believe how so many people easily condemn something they don't know anything or understand much about!

Although I fully sympathize with the check writer whose check was declined at a store under the glaring eyes of other snooty shoppers, although I know how it feels to go through a seemingly shameful ordeal of having a check payment declined at the store counter, I still believe all these could have been avoided had the check writer understood what Telecheck is all about before he vents his ire on that company!

First of all, Telecheck does not keep a record of your bank balance. As experienced by some check writer, you may have more than enough in your checking account and still have your check declined by a merchant subscribing to Telecheck's services for a lot of other reasons. -  So what is Telecheck all about anyway, and why will it decline a check payment that has more than sufficient balance to cover the transaction in question?

Telecheck is a company that has been providing merchant services designed to safeguard businesses and financial institutions from fraudalent and bad checks. Through its check verification and check warranty services, Telecheck allows its merchant subscribers to accept check payments anytime without worrying about whether the check is fraudelent, or if it will bounce or not due to insufficiency of funds once presented to the bank. In the past, merchants have been at the losing end of uncollected payments resulting from fraudelent (stolen checks) and bad checks (with insufficient balance in the account). Now, Telecheck shoulders the risks entailed in such spurious transactions. Once telecheck warrants a check presented at a store front, it guarantees payment to its merchant subscriber even if the check turns out to be a rubber check or proven to be a fraud in the future. Telecheck has been providing these services to merchants worldwide for the past forty years. However, please note that it is the merchant's interest that Telecheck is primarily protecting here and not necessarily the consumer's (although indirectly the consumers also benefit since stolen checks are detected earlier and prevented from being used at the store front).

What TeleCheck does, apart from early detection of fraudelent checks, is to try to predict when a consumer might present a bad check for payment. It does not have access to your banking account, nor does it maintain records of other checks you may have written in the past. Instead, as long as TeleCheck has no adverse information about you , your check writing habits or other statistical indicators of check fraud, your check will be approved. So it is the lack of bad information, not the presence of good information that determines whether you are worthy. Accepting check payments has never been riskier for merchants, but with TeleCheck, retailers are now able to continue accepting checks from consumers with greater ease and less worries.

Allow me to point out here that acceptance of check payments has always been the prerogative of the store owner, - who may or may not accept check payments at his discretion, or even become selective in accepting check payments. He is not obligated by law to accept checks as payments from consumers. If he does accept check payments, he is actually providing an extra service to them. And, in providing such services, the merchant may exercise his option to hire companies like TeleCheck which provides check verification and check warranty services to merchants to minimize the entailing risks associated with check payments in the market place.

Here is how TeleCheck verification process goes. Each time a check is presented for payment at a store, the banking information reflected on the check is recorded and checked against Telecheck's checkwriter database which includes data of all checks presented for payment in all merchant stores who have subscribed to the company's services. The check then undergoes a risk analysis process which is based on historically proven statistical models(actuarial studies) used effectively by the company for years now to determine the level of risks inherent in every check transaction. Said analysis will indicate possible incidence of fraud, or the liklihood of the check having insufficient funds by the time the check is presented to the bank. Each check presentment undergoes an individual and unique risk analysis process each time. The analysis may take into account such data as frequency of check issuance and amounts of each check. The result from this process analysis serves as the basis for Telecheck to come to a decision as to whether or not it will guarantee the check with the merchant. If the analysis shows the risk level falls below its acceptable criteria, then Telecheck won't guarantee the check. More often than not, the merchant likewise uses this 'no guarantee' decision by Telecheck as the basis to decline your check payment at their store. Take note once more that it is the merchant who really declines accepting your check payment. Telecheck merely tells the merchant whether or not it is willing to shoulder the entailing risk by guaranteeing or not guaranteeing the check payment. Accepting the check despite a no guarantee decision given by TeleCheck is well within the authority of the store owner and can be done at at his discretion. This, however, rarely occurs since accepting your check will mean incurring additional bank charges for the store owner, not to mention the additional work load involved with depositing and clearing your check payment with his own bank. The common practice is to decline check payments not guaranteed by TeleCheck since this is more convenient to the merchants.

Does TeleCheck's no-guarantee decision mean your check is not good?

Defiitely not? TeleCheck's decision on each check presentment is based on predictive risk models and may not be totally accurate. Also, Telecheck does not access your bank account prior to making its decision. What a no-guarantee decision by TeleCheck simply means is that the company may not have enough information about your check to approve the current transaction, or, that you may have an unpaid check or an outstanding debt reflected in TeleCheck's data base. Let me point out here that unpaid checks or any outstanding debt you may have incurred with any TeleCheck affiliated merchant within the last 7 years will remain in TeleCheck's database and will definitely affect your check writing status.

If your check gets declined at the store front, don't raise hell! It happens all the time - and it only means that for that particular transaction, TeleCheck is taking a 'rain check' on you (an option they can freely exercise anytime). It is something that one must not be ashamed of as it does happen to anyone anytime, even to presidents of big corporations. The declined transaction won't even affect your credit rating among all the credit reporting agencies.

Not all declined transactions are irreversible too. Once a transaction is declined, the clerk will hand the check writer a courtesy card with a seven-digit Record Number written on the front of the card. The Record Number on the courtesy card expedites customer service when a check writer calls TeleCheck® to inquire about the transaction. A simple call to customer service may even overturn TeleCheck's decision  right then and there at the store counter (for issues given a code 3 status)! For all you know, they may only require confirmation of your identity and a check on your current bank balance. Declined transactions due to unpaid checks and uncollected debts, however, may not be reversed until the account is fully settled. Here, it is again important to note that TeleCheck  has the option to turn over all unpaid checks and uncollected debts which have remained outstanding for some time to a collection agency. The collection agency is the one who makes those nasty collection calls to you and even report the same to the credit rating agencies.

Before you make that irate call to TeleCheck's Support Staff, before you holler and shout invictives at them, think twice.  The person on the other line may be the one who can help you out of the ticklish situation you are in right now!


1. As much as possible, use cash or debit card when shopping.
2. Verify your check writing status with TeleCheck before going to the store if the intention is to pay by check to make sure you have no derogatory records on your TeleCheck file. (No guarantee of approval here since each check presentment is treated on a case to case basis and analysis depends on other factors!)
3. Make sure you or your authorized signatory is present at the counter when the check is presented. Telecheck will not make further verifications on the transaction unless you or your authorized signatory is the one presenting the check payment. Furthermore, please remember that by authorized signatory, it does not refer to the one you have unilaterally given authority right then and there, but must be the person you have authorised in your bank records.
4. Before, using your check, make sure you have settled all unpaid checks and outstanding debts from your old accounts which may have been tied up to your social security or driver's license number.
Here are TeleCheck's Contact Info:

Declined Check Information for Check Writers

Returned Check Collection

Free annual file disclosure pursuant to the Fair Credit Reporting Act

Fraud, Identity Theft, Forgery

TeleCheck Services, Inc.
5251 Westheimer
Houston, Texas 77056


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  1. I think in this age of technology, it is absolutely ridiclous that TeleCheck doesn't have the technology to verify funds with banks. For a hard working person who writes a check for simple things such as groceries, it is inexcusable that a check is denied when the account is in good standing. I am all for catching fraudelent checks, bad checks, etc. but leave the folks out here that are barely making ends meet alone.

  2. I can not even remember the last time I wrote a check at a store. My sister used to do it a lot though. She never got denied, but I remember it was a pain when the store first started using Telecheck services. The first couple times, you wrote a check you were denied, no matter what.