First Data: TeleCheck®

• Identity theft is the fastest-growing crime in America.

  The FBI has ranked identity theft as the fastest growing crime in the United States since at least 2004. Social security numbers, credit card numbers and other confidential, personal data falling into the hands of fraud rings who, in turn use the data to acquire credit, cash, and goods. The internet has changed the landscape of check fraud. Today, organized fraud rings can easily manufacture realistic, but wholly fraudulent checks, identity cards, letterhead, phone numbers – again, with one goal -- to fraudulently seize goods, services and cash from retailers and consumers.

  These crimes are rampant. As a country and a culture, we have responded with anti-fraud legislation, enhanced computer firewalls and elaborate usage detection systems. These measures have helped, but not halted the epidemic. But we are here to help. See the list of questions below for answers to your questions about check processing and fraud prevention.

  Choose a FAQ below.

  - What can be done to fight check fraud and identity theft?
  - How does TeleCheck do it?
  - How does risk decisioning help merchants?
  - How does risk decisioning help consumers?
  - What does TeleCheck look for in developing its risk profiles?
  - How do these risk models affect a check writer’s experience at the point-of-sale?
  - How effective are these models in reducing fraud?
  - Has TeleCheck performed a “funds check” on your bank account?
  - You have more than enough money in your account to cover the check. Why did you get a Code 3?
  - You've never written a bad check. Why did you get a Code 3?
  - You hardly ever write checks. Why did you receive a Code 3?
  - How can TeleCheck interfere with your ability to write a check?
  - Risk decisioning seems intrusive – is it legal?
  - Why does TeleCheck need to know your personal information to look at your records?
  - Your check was declined at the point-of-sale because of fraudulent activity on your account. You have
     reported the fraud to your bank, check acceptance companies and the police, but you are continuing to
     have your checks declined. Why?
  - You paid your check or bank account debt(s) on file with TeleCheck. Why were you declined?
  - What are the exact reasons you were declined?
  - You were embarrassed in line when your check was declined.
  - You ordered a copy of your file report to find out why you were declined. You saw nothing negative.
     Why were you declined?
  - Why did TeleCheck approve a check when the check casher used a fraudulent version of your
     drivers' license?
  - Why would you be declined if you have great credit?
  - You were declined, and you were told by TeleCheck that your data had been “linked” to another
     check writer’s data. How did this happen?
  - What can you, the consumer, do to protect against check fraud?
  

  • What can be done to fight check fraud and identity theft?
  • To effectively win this battle and reduce the numerous types of fraud, frontline stakeholders -- banks, retailers, consumers – need tools to predict where identity theft or fraud might occur before it occurs – not after. And that’s where TeleCheck comes in. For the last 40 years, TeleCheck has been an industry leader in check acceptance, check processing and data analytics. These services are valuable tools for merchants and banks in attempting to recognize and deter fraud before it occurs.
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  • How does TeleCheck do it?
  • TeleCheck sees a lot of checks, and the data TeleCheck derives from these checks provides tremendous analytical opportunity to fight fraud.
    
    
    • Debt verification: TeleCheck maintains a live database comprised of check and bank account debt records reported by hundreds of thousands of merchants. TeleCheck can verify the presence or lack of unpaid debt related to a check writer in response to subscribing merchant’s queries and provide check acceptance decisions based on what it finds.
    • Risk-based decisioning: TeleCheck has also examined historical check data and identified patterns by analyzing and comparing the characteristics of valid check transactions vs. invalid (fraudulent) check transactions. From the knowledge it has gathered, TeleCheck has built statistical profiles of what a solid check transaction looks like – and what a fraudulent one may look like, too. Using these analytical profiles as backdrops, TeleCheck can also provide predictive risk decisioning to its merchants to augment its base line debt verification services.
    
    Together, check verification and risk-based decisioning work as invaluable weapons to combat commercial losses associated with check fraud.
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  • How does risk decisioning help merchants?
  • Risk decisioning helps control and reduce financial loss. Merchants can accept checks with greater confidence that the checks are reliable.
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  • How does risk decisioning help consumers?
  • TeleCheck alerts consumers as well as merchants to fraud -- a TeleCheck acceptance decision is often the first warning a consumer receives of their account’s compromise. TeleCheck provides consumer convenience, as risk decisioning lets merchants continue to offer check writing as a payment option. And, above all, risk decisioning results in lower prices for consumers because the merchant has been able to reduce losses areas associated with check fraud.
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  • What does TeleCheck look for in developing its risk profiles?
  • Things like:
    
    • What do fraudsters typically buy?
    • What industries and stores do fraudsters frequent?
    • How fast do they move?
    • How much do they spend?
    
    These are just some “frontline” fraud indicators, but TeleCheck studies many others as well. In fact, there are literally hundreds of variables TeleCheck evaluates daily to predict, with ever-refining accuracy, when and where check fraud is likely to occur.
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  • How do these risk models affect a check writer’s experience at the point-of-sale?
  • When a consumer writes a check to a TeleCheck subscribing merchant, the merchant first submits the check to TeleCheck for analysis before accepting it. The merchant does this by either manually or electronically feeding the check’s MICR information and often the check writer’s ID number to TeleCheck.
    
    When TeleCheck receives these pieces of identifying data, it first looks for “matches” of the identifying data within its database of transactions, reviewing for evidence of unpaid check or account debt on checking accounts known to be held or used by that check writer. Then, TeleCheck analyzes the transaction against one of its many risk models. The model looks for “fraudulent” characteristics and good characteristics and provides risk decisioning accordingly If the transaction is above the applicable threshold of acceptable risk, TeleCheck will flag it and issue a single-digit code – a “3” -- back to the merchant. This Code does not tell the merchant the check is not good or that the customer does not have enough money in their account to cover the check. This “Code 3” is telling the merchant that the transaction contains a significant level of risk markers.
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  • How effective are these models in reducing fraud?
  • They are very effective-- but they are only predictive, based on information obtained at the point-of-sale and historical data. They cannot predict with 100% accuracy which check transactions will complete or return. However, through this predictive risk decisioning, TeleCheck aids retailers in saving billions of dollars that might otherwise be lost to fraudulent activity -- the kind of financial loss that is rarely recouped.
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  • Has TeleCheck performed a “funds check” on your bank account?
  • No. TeleCheck has not performed a funds check on consumers' accounts when they present their check at the point of sale, and there is no certainty as to whether a transaction will (or will not) fail.
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  • You have more than enough money in your account to cover the check. Why did you get a Code 3?
  • Again, TeleCheck did not perform a funds check on your account at the point-of-sale, and your account balance was not weighed into its risk decisioning. The transaction carried risk indicators independent of bank balance.
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  • You've never written a bad check. Why did you get a Code 3?
  • Evidence of prior bad check writing history is not determinative in how a risk model ultimately decisions on a check transaction. The transaction carried other risk indicators.
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  • You hardly ever write checks. Why did you receive a Code 3?
  • When your transaction was analyzed, it probably had several characteristics that made it look risky. In fact, if the account number was rarely, or never seen by TeleCheck before, this in itself could be a factor in a decision to decline.
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  • How can TeleCheck interfere with your ability to write a check?
  • Check acceptance is a choice made by retailers. Surely you’ve experienced shopping at a store that will not accept checks. Those merchants have experienced too many check-related losses and decided the gamble is not worth it. Obviously, TeleCheck does not want to prevent good check transactions from being completed. But, a consumer's ability to write checks is only as good as a merchant's ability to safely accept them. If a merchant can't achieve an acceptable level of security in a payment method, the payment method ceases to be an option. TeleCheck is committed to promoting continued, reliable check writing.
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  • Risk decisioning seems intrusive – is it legal?
  • Fifty years ago, it wasn’t as necessary to rigorously scrutinize each check transaction prior to acceptance, but times have changed. Now, risk decisioning is one of the most effective and necessary tools available to control costs and protect the check writing process. TeleCheck’s risk analytics have permeated the retail landscape based on their reputation of sound reliability. In fact, TeleCheck routinely works in cooperation with law enforcement at all levels to detect and deter fraud. Be assured that TeleCheck does not share the specifics about any debt with any third party retailers or financial institutions – we take your privacy as seriously as you do.
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  • Why does TeleCheck need to know your personal information to look at your records?
  • TeleCheck looks at transactions by identifiers that will pinpoint who you are to the exclusion of all other individuals - your personal identifiers authenticate you to TeleCheck. By verifying this information, TeleCheck can be assured that any release of your personally-identifiable financial information held in its databases is limited to you or a third party, pursuant to your instructions.
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  • Your check was declined at the point-of-sale because of fraudulent activity on your account. You have reported the fraud to your bank, check acceptance companies and the police, but you are continuing to have your checks declined. Why?
  • You could be continuing to experience check declines because of fraudulent activity on your account occurring outside the fraudulent activity you originally reported. For example: you report that checks 200-225 on account 1234 were stolen. If a fraudster is using check numbers on account 1234 that are outside that range, the records will post active. If a fraudster is counterfeiting/printing checks on your account number, that data may have been submitted to TeleCheck. Or, a fraudster could be using your driver’s license number to cash checks on other accounts. When this occurs, it can “link” those bank accounts to your bank account. Or, the risks associated with a transaction can result in risk-based declines. If you’re having continuing problems, we urge you to contact TeleCheck periodically to check on the status and provide us with updated information. We’ll work with you.
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  • You paid your check or bank account debt(s) on file with TeleCheck. Why were you declined?
  • Even when a debt has been on file with TeleCheck and has been paid, a Code 3 may still be issued based on risk decisioning.
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  • What are the exact reasons you were declined?
  • If you were declined because of unpaid check or bank account debt, TeleCheck can provide the specific details of that debt to you – just ask. If you were declined as a result of risk decisioning -- there can be literally 100s of variables active within a risk model and the risk-based decisions it generates. Each risk model is tailored - with certain variables used, others not, and weighted. Oftentimes, the models are tailored to specific concerns of the merchant being serviced -- if they are in the midst of high fraud loss, their controls might be higher than the next merchant's. TeleCheck will identify for you up to the 3 major reasons your check was declined.
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  • You were embarrassed in line when your check was declined.
  • TeleCheck’s recommended point-of-sale procedures are designed to maximize your privacy and minimize third-part speculation as to the reasons for the decline. If you received a Code 4, again, we assure you that your personal information or the details of debt records on file with TeleCheck are not shared with third parties. If you received a Code 3 the merchant knew you had received a risk-based decline, and that there was no evidence of unpaid debt. For any decline, you should have received a written notice providing information about the decline, including how and where to receive more detailed information. If this was not your experience, please let us know. Constant refinement and improvement of the point-of-sale experience is a TeleCheck priority.
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  • You ordered a copy of your file report to find out why you were declined. You saw nothing negative. Why were you declined?
  • If your decline was risk-based, you would not have seen evidence of unpaid debt on file in your file report. Again, a risk-based decline is not based on evidence of unpaid debt. The variables of risk models are “non-judgmental” –risk decisioning is based on statistical probabilities.
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  • Why did TeleCheck approve a check when the check casher used a fraudulent version of your drivers' license?
  • Photos of check cashers have not been transmitted to TeleCheck. TeleCheck uses the driver’s license number it receives in analyzing a transaction.
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  • Why would you be declined if you have great credit?
  • Your credit experiences are not taken into account when TeleCheck analyzes a check transaction. A risk model is designed to act as a safety precaution and does not speak to or reflect on a check writer’s credit status.
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  • You were declined, and you were told by TeleCheck that your data had been “linked” to another check writer’s data. How did this happen?
  • This could happen for a variety of reasons: misprinted information on ID cards, miskeyed MICRs or IDs at the point of sale, or multiple check writers on a single account, such as a business account. TeleCheck can “unlink” these inaccurate links when alerted and given necessary data.
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  • What can you, the consumer, do to protect against check fraud?
  • • Guard your checkbook as carefully as you would your cash and credit cards
    • Have new checks delivered to a secure locale – not a non-locking mailbox
    • Do not allow other people to negotiate your checks
    • If you’ve been victimized, close your bank account and open a new one
    • Alert your bank and check acceptance companies immediately if you believe someone is using your checking account number and/or identity
    • File a police report identifying stolen checks
    • Place forgery affidavits on file with your bank
    • Give your bank power-of–attorney to discuss issues related to the theft with companies such as TeleCheck
    • Report check theft to:
      
      TeleCheck Fraud, id theft department
      (800) 710-9898
      www.telecheck.com
      
      Fidelity National Information Services (was Certegy)
      (800) 437-5120
      www.fidelityinfoservices.com
      
      ChexSystems (formerly SCAN)
      (800) 262-7771
      www.consumerdebit.com
      
      CrossCheck
      (800) 843-0760
      http://www.cross-check.com

Helpful Online Resources:

Federal Trade Commission @ www.ftc.gov
The Identity Theft Center @ www.idtheftcenter.com
Consumers Union @ www.defendyourdollars.org
Privacy Rights Clearinghouse @ www.privacyrights.org

Thank you! While identity theft may be the fastest-growing crime in America, TeleCheck works daily to reduce its impact to both retailers and consumers. We appreciate your understanding and cooperation as we continue this effort to keep check writing a convenient and safe payment option in the American marketplace.

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