It can be very frustrating when a bank refuses to open your account. From drawing money from an ATM to paying bills, having a bank account has many functions.
You might think of many different reasons why a bank might do this. One of the major reasons is evidence of mismanagement of your previous accounts.
How do the banks know about your questionable past records? This is where an account reporting agency comes in.
Before letting you open an account or engage in financial transactions with you, financial institutions surely want to check if your previous account was ‘closed for cause’, that is, if a bank shut your account down because of something you did.
Early Warning Services or EWS is a leading credit reporting agency that can inform a bank about past mishandling of accounts and may stop you from creating an account.
Below is a brief guide about what EWS is, how it can impact your banking future and how you can prevent that from happening. Read on to know how you can better deal with EWS:
Table of Contents
- About Early Warning Services
- EWS Screening – How It Works
- How EWS Can Hamper Your Banking Activity
- Key Differences Between EWS, ChexSystem and TeleCheck
- Accessing Your EWS Report
- Making a Solid Disputing Claim
- Avoiding EWS Related Scams
About Early Warning Services (EWS)
Like a credit bureau, Early Warning Services (EWS) is a consumer reporting agency. However, instead of providing details about consumers’ credit card and loan payments, EWS provides reports about consumers’ checking and saving accounts.
EWS was created by big names in the banking sector, including Chase, Capital One, Bank of America and Wells Fargo. The idea is to prevent fraud and reduce risks.
While other account reporting agencies like ChexSystems and TeleCheck focus on mismanagement activities such as overdrawing or writing checks for closed accounts, EWS specializes in detecting fraudulent activity. The agency’s system tracks negative interactions with the banks. They can include fraud, forgery, check alteration, counterfeiting, etc.
If your name is detected by the EWS, you can be at a great financial disadvantage.
Although the system is great at helping banks and financial institutions screen applications, it can wreak financial havoc for these individuals. Fortunately, there are ways to find a way around EWS detection and even get your name out of their system.
EWS Screening – How It Works
Early Warning Services is a nationwide credit reporting agency that complies with regulations of the Fair Credit Reporting Act (FCRA).
Financial institutions, such as banks and credit unions, subscribe for their services. It provides screening of new applicants and even current account holders.
As mentioned above, the agency checks for previous records of fraudulent activities, including forgery, counterfeiting, check altering, check kiting and so on. The idea is to ensure that the applicant’s past record is clear and that he/she is a good candidate for carrying out financial transaction with. Screening process can be carried out online, through phone, or at the teller window.
Although EWS does not take into account credit history of an individual, it does take a closer look at an individual’s financial activity. For information, it can consult different banks or other relevant third-party institutions.
For the most part, EWS checks for deposit accounts and how they have been used. The agency aims to be neutral. This is the reason it does not just includes records of negative activities, it also includes records of positive activity. This gives financial institution thorough insights and helps them make better decisions.
Although the agency aims to be accurate and takes extra care when collecting data, there are ways for you to dispute their claims with aspects of reports you do not agree with. Also, the report does not aim to give clear ‘yes/no’ directions to the client. The idea is to help financial institutions provide customers with suitable products and feel comfortable while doing so.
For an individual though, the report can have a massive impact. Read on.
How EWS Can Hamper Your Banking Activity
The biggest negative impact a EWS report can have on an individual is that it does not let him/her open a bank account.
What’s more, it can also lead to closing of account after it was opened.
While you might not be hatching a currency counterfeiting scheme, even small blunders such as owing a small fee to a bank can lead to negative reporting on EWS, even though you have now paid the amount.
In case of a negative EWS listing, you generally have two options. You can either wait it out or you can opt for a second-chance bank account.
A second-chance bank account, as the name suggests, helps you open an account despite the blemishes. However, it is not without its drawbacks. For instance, the bank charges a fee for opening this account. Also, lending policies are quite unreasonable.
Key Difference between EWS, ChexSystems and TeleCheck
EWS, ChexSystems and TeleCheck are three institutes that track customers’ financial records when they apply for a bank account. People generally do not know about them until their account application gets rejected.
Although all three of them serve the same purpose, that is, fraud detection, the key difference lies in how they present this information to the bank.
EWS presents financial information on a simple form. ChexSystems has an additional evaluation section at the bottom.
TeleCheck includes a risk score in addition to two of these features.
It is very important to know which service your bank is using so that you can create a dispute plan accordingly.
Accessing Your EWS Report
After you come to know that it’s a negative EWS listing that is preventing you from opening an account, it is time for you to access your free report. The report would clearly contain details about your alleged negative financial behavior.
If you find them to be inaccurate, you can immediately take action to rectify it.
To get your free copy, you can visit the EWS Consumer Services Page. The process is very simple. All you have got to do is download the identification form from their website, fill it, and send this form back.
You can either mail the completed form to their address (mentioned below) or you can create an account at their portal at consumerservices.earlywarning.com and send them an email at firstname.lastname@example.org.
Attn: Consumer Services Department 16552 N. 90th Street
Scottsdale, AZ 85260
The report will contain clear reasons about why your name was included. It also includes any previous disputes and details about whether they were denied. It gives your bank an idea about your responses to accusations in the past.
Making a Solid Disputing Claim
Early Warning Service can hold information against you for years. After receiving your free report, you may find that the information is inaccurate or that it does not hold true anymore, for instance, you have paid the long-owed debt but it still shows up.
If that’s the case, it is time to prepare a disputing claim to have that information removed.
Here is a checklist of what might be required:
- Your consumer identification number
- Description of the information you are disputing, like account numbers and ABA
- Reason for the dispute
- Details of each dispute on a separate piece of paper
- Relevant account details
- Copies of supporting documents to back your claim
You will get a response from EWS within 30 days. If the company finds the proofs to be authentic, they will remove the negative listing.
If the company does not approve your request, you will have to file a rebuttal. This will mean that the bank will make its own judgment when reviewing your application. The rebuttal application should not contain any businesses’ names or terms of profanity.
Avoiding EWS Related Scams
You should know that EWS is also a target of criminals looking to take advantage of desperate people. Here are some ways you can identify malicious intent:
Firstly, note that EWS never charges a fee – the report is absolutely free. There are thousands of websites claiming that they provide EWS services. They might charge you a fee for requesting report. Beware of these entities!
Debt collection scams are also quite common. There are companies that might contact you for collecting money on behalf of EWS. If that’s the case, you need to immediately report this company to Consumer Financial Protection Bureau.
There are also companies that falsely claim that they can file a dispute on your behalf and get blemishes removed from your EWS report. Be extra careful when they claim that they guarantee results. Understand that there is NO GUARANTEE when it comes to removing EWS negative listing.
A better approach would be to deal directly with EWS and file your dispute yourself.
Although Early Warning Services provide a great way for financial institutions to verify applicants’ financial credibility, sometimes, mistakes can be made. If you are on the wrong side of this, you need to take immediate action.
The good news is that you can fix inaccurate information from the EWS report by filing a dispute with them directly. If your claim is legitimate, the negative listing will be removed and you will easily be able to open a bank account.
Also, you need to be wary of fraudulent companies as they can exploit you.