Let me tell you a story about a guy named Nick and one of the prettiest banks in town. It’s a fairly long story, so if you’ve been following the drama unfold you can skip ahead to where the story says “Fast forward to September 27, 2010.”
Here’s what happened:
Once upon a time there was a guy named Nick. Nick was a nice young man who enjoyed to write, talk and think about money. One day, Nick vowed to work hard to limit the number and severity of his money mistakes moving forward. So he decided to talk about his money decisions with anyone who would listen. If he made a mistake, he would announce it. If he did something great, he would tell people about it. Maybe, just maybe, someone could benefit by learning from Nick’s successes and mistakes.
So Nick decided to become a “blogger.” At that moment Step Away from the Mall was born!
Fast forward to August 11, 2010.
Nick was listening to a personal finance podcast and heard about a really cool concept – rewards checking. So he decided to blog about it. He was so excited that even used an exclamation point in the title of the post!!! Little did he know, but he was slowly falling in love.
Fast forward to September 8, 2010.
PerkStreet Jen found Nick’s post about finding out about PerkStreet and invited him to open an account and blog about his experience. She even offered to donate some cash to a very worthy cause. Nick was very excited and, three days letter, submitted an application for an account. The SAFTM PerkStreet Project was born!
Nick was getting really excited and couldn’t wait to get his account open and funded. He went away for a few days and, when he got home at 1:00 a.m., he was psyched to see an envelope from PerkStreet peeking out from the pile of mail. “PerkStreet, my darling,” Nick proclaimed, as he prepared his envelope-opening finger to tear open the envelope and reveal the debit card of his dreams, “what a nice surprise after a long few days away.”
Rrrriiiiiiiip! But there was no debit card – just a sheet of paper. Curious, but not yet concerned, Nick began to read the letter. At first the letter seemed normal and then things turned sour:
Unfortunately at this time we are unable to open an account due to an unsatisfactory report from ChexSystems, a consumer reporting agency.
I won’t repeat how Nick felt when he read those words, but you can check that out here.
So Nick decided to order a ChexSystems report and get to the bottom of it. What could be “unsatisfactory” about his ChexSystems report? He never abused a checking account. In fact, he even has “preferred” banking at his current institutions.
Fast forward to September 27, 2010.
Nick gets his ChexSystems report in the mail. In the report ChexSystems indicates that it reports the following five things to inquiring financial institutions:
- Reported information (this refers to accounts that have been mishandled, reported for cause and/or outstanding debts);
- Inquiries initiated by consumer action (this refers to things like applying for a credit card or completing an application at a financial institution);
- Retail information (this refers to returned checks writing on an account and certain collection accounts);
- History of checks ordered (this refers to a record of check orders placed within the past three years); and
- Social security number validation (the year and state the social security number was issued).
So you can see how information listed in some of these categories could be viewed as “unsatisfactory,” right? Nick had done some research on ChexSystems after PerkStreet turned him down, so he knew what to expect and figured information listed on items 1, 2 and 3 could be seen as negative and 4 and 5 more informative than anything else.
So Nick started going down his report. This is what was reported on Nick’s ChexSystems report:
No Information Found. Yes, that’s right! Nothing. No mishandling of accounts. No accounts reported for cause. And no outstanding debts. How could this be “unsatisfactory”?
Inquiries initiated by consumer action:
There were three inquiries on the report. Two of the inquiries were from Ally Bank. Nick had recently opened two savings accounts and six CDs at Ally. The only types of accounts Ally offers are Checking, Savings, CDs and auto loans. They don’t offer credit cards or anything like that. So the only “applications” Nick could have submitted would be to buy or lease a car (which he would never do – he buys cars only with cash) or deposit his own money with the bank.
The third inquiry was from “THE BANKCORP.COM.” (That’s PerkStreet.)
So how could this be seen as “unsatisfactory” to the point of denying a checking account application? Remember, Nick wasn’t talking about an unsecured loan to buy Iraqi dinar… He was trying to deposit his money.
No Information Found. That’s right! No returned checks! No collection accounts! Nothing “unsatisfactory.”
History of checks ordered:
No Information Found. That’s right, Nick hadn’t ordered checks in three years, I guess. He was not exactly sure if this was true because he and his wife opened a joint checking account when they got married two years ago. But maybe they didn’t order checks. Either way, is this “unsatisfactory”? He doesn’t write a ton of checks. Is that bad?
Social security number validation:
Not sure exactly what this is all about, but his social security number was issued a long time ago in Massachusetts.
So what do you think? Unsatisfactory? Is Nick the type of person you wouldn’t want to bank with? A guy who had absolutely no negative banking history and just opened two savings accounts?
Also, in case you’re new to this blog: Nick is me. Why did I write it like a story? Because if I wrote it in the first person there would be much more emotion and exclamation points! So I decided to tell the story this way. It was kind of fun.
What did I learn? Not much actually.
I learned that even well-intentioned banks can make mistakes. I’m sure they won’t “regret” not having me as a customer and will make a bunch of folks happy with their rewards. That’s OK. The plan wasn’t to get rich off of 2% of my spending anyhow.
I also learned that putting your finances in other people’s hands can be annoying. I’ve done absolutely everything I could think of to be a “good consumer.” I don’t borrow money very often (I only have student loan and house debt other than credit cards that I pay off in full before the bill arrives). I’ve never written a check that can’t be cashed. And I don’t apply for a ton of credit (the last credit card application was submitted over two years ago to earn points for my honeymoon).
So I was quite annoyed that I could do everything right and still be denied an account like this. It was nice to get an apology though. At least they pay attention (at least to what people are saying). I’m not quite sure what it would take to open an account there though… No hard feelings. Apology accepted.
What did you learn from this? Anything?
Until next time, put your credit card down and slowly step away from the mall!