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#38571 - 10/24/02 12:34 PM Privacy Question
RVFlyboy Offline
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RVFlyboy
Joined: Oct 2000
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Soaring over Georgia
Here's a new one (at least to me):

We have a customer who has a business checking account with us (well, actually we have more than one customer with business checking accounts, but that's not the point of the story). Anyway, this customer wrote a check on her business checking account this past Sunday evening in Wal-Mart. When the Wal-Mart cashier processed the check through their check verification system, the cashier received a warning that the customer had had two other large checks recently clear on this account. The customer had in fact recently written two large checks to the Treasury Department on the account. But as of Sunday night these checks had not even been presented to us for payment. We didn't receive them until Monday's cash letter. The customer was upset at us, believing that we had shared her financial information with Wal-Mart, or whoever Wal-Mart uses for check verification. But it wasn't us - as I said we didn't even get the checks until Monday. So how could Wal-Mart's check verification service have this information? I suspect that Treasury must run their large checks through some type of check verification database that captures the information and is part of the same database that Wal-Mart's verification service uses. Does anyone know whether this is true or whether there is some other explanation that makes sense?

It all points back to what I said back in early 2001 - our privacy policy should simply be two sentences: "There is no privacy. Get over it."
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#38572 - 10/24/02 01:41 PM Re: Privacy Question
Nanwa Offline
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Clintonville, WI, USA
I don't know what data bases Chexsystems gets into, but some of our response reports have all kinds of things like NSF checks etc. If you didn't give out the info, the customer can rant all they want, YOU followed regulatory protocol.
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#38573 - 10/24/02 02:05 PM Re: Privacy Question
Al Miller Offline
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Pleasanton CA USA
What activity has there been on the account the past 10 days? To whom were the 5 largest checks payable? Is there a pattern? Maybe the same check verification service verifies for several large companies in town. Wal-Mart should share who does their check verifications.
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#38574 - 10/24/02 02:10 PM Re: Privacy Question
Happy Offline
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Happy
Joined: Jan 2002
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"There is no privacy. Get over it."
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Hey Jim, I like that!! Another thought! "There is no privacy. Get a life" OR "There is no privacy" Get real.

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#38575 - 10/24/02 02:18 PM Re: Privacy Question
Rubaiyat Offline
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Posts: 1,373
Lido Deck
If the cashier was informed that 2 large checks had been written recently and the customer had indeed written 2 large checks to the Dept. of Treasury, wouldn't that mean that Treasury either verifies or reports certain transactions? Seems like it flows back to Treasury.

I'd be curious to know what verification system Wal-Mart was using but more importantly I'd want to find out what process Treasury uses when they receive large checks so if this comes up again, you can assure your customers it wasn't you who "violated" their privacy.
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#38576 - 10/24/02 02:39 PM Re: Privacy Question
Andy_Z Offline
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Here is the scoop as I know it. Many Wal-Marts use the same systems many merchants, and presumably now government agencies(?) use. It is a theft prevention feature we're discussing.

When large items are presented against an account, these are noted for about a 2-week period. To deter losses, if a checkbook is stolen and ID theft is being committed, it alerts the merchant that several large items have recently been processed in that system. They don't necessarily deny the check, but reduce risks by ensuring that adequate ID is verified with the item. Much like your credit card company calling you about an unusually large purchase.

So if I was going from Wal-Mart to Wal-Mart because I knew they were accepting my checks, they would see that there is a lot of activity and would be more diligent as to the owner of the account being the writer of the check.

They see by virtue of the system what the amounts were, but not to whom they were payable.

So to Jim, the customer is blaming you because you are their bank. You didn't write the check, mail it off or even know it had been written, in any amount or to any one person or agency, but that doesn't mean you aren't wrong, I guess.
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#38577 - 10/24/02 03:15 PM Re: Privacy Question
SkyDiver Offline
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Northeast
In Jim's situation...Would it have been the financial institution with the Treasury's deposit account that reported a "large transaction" on Jim's customer's account? What, if any, regulations apply to this type of theft prevention/monitoring?

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#38578 - 10/24/02 03:21 PM Re: Privacy Question
Andy_Z Offline
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Someone ran the check through a verification terminal and keyed in the amount of the check. I can't say it was Treasury but I don't think the receiving bank would do this independently. But I am guessing.

I don't see that any regulations were broken so long as ChexSystems is operating legally,which they are. FCRA rules would apply, but no services were denied or the cost increased as a result.
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AndyZ CRCM
My opinions are not necessarily my employers.
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Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#38579 - 10/24/02 03:34 PM Re: Privacy Question
RVFlyboy Offline
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RVFlyboy
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Soaring over Georgia
I agree that I don't think any regulations were broken. We're just trying to get to the bottom of how this happened so that we can make sure our customer contact people know how to respond to our customer complaints on this. Plus it just goes to demonstrate that privacy is mostly an illusion in peoples minds.

Also, one correction on my scenario - I've now found out that it was actually the IRS to where the checks were written and they were deposited by the IRS with Bank of America. So from my perspective, only three possible players could have entered the check information into the database: IRS, Bank of America, or the Fed (and I think the Fed is the least likely of the three).
Last edited by jbedsole; 10/24/02 03:37 PM.
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#38580 - 10/24/02 03:39 PM Re: Privacy Question
BANNED BY BOL MANAGEMENT Offline
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It is really strange if Treasury is using a check verification system. What would they do if the check was rejected for some reason?

Perhaps the customer was actually buying something from Treasury or a related agency, like one of those cars that are always being advertised at auction. If something is being purchased, Treasury is like any other merchant out there - verifying the check before goods are delivered!

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#38581 - 10/24/02 03:41 PM Re: Privacy Question
Don_Narup Offline

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Joined: Jul 2001
Posts: 3,708
Las Vegas Nevada
Jim,
You are so right about Privacy. I received a call yesterday from "Experion" who wanted to verify busines information. When I asked what this was for, the person read from a script that said 'You may know us by our former name TRW which is the largest credit reporting agency in the US." I commented that I had not heard of a credit bureau calling anyone for information, and asked that they put the request on a letterhead and mail it. The response was they cannot do that unless I verify the company name address and ownership. I asked what this information was being used for and was told a "Database" The upshot of the story is it had nothing to do with a company credit bureau profile, but a database of information that is being sold by Experion to marketing companies.

I posted last ewek about the city of Huntington Beach Ca. marketing a credit card, and using personal informatin on utility bills, library cards, and school records to use for direct marketing purposes.

So, How did banks get targeted? Could it be because its the only industry that has the integrity to comply.
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#38582 - 10/24/02 04:27 PM Re: Privacy Question
Princess Romeo Offline

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Don - The call you received from Experian sounds like what Dun and Bradstreet has been doing for years.
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#38583 - 10/24/02 05:33 PM Re: Privacy Question
Don_Narup Offline

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Posts: 3,708
Las Vegas Nevada
Bonnie,

Yes that is true, but at least D&B does not disguise what it is doing. Using the name Experion and reference to updating your Credit Report information, when in fact they are collecting data to specifically sell is deceptive.
Makes me wonder how much "confidential" credit information they are using to create the various marketing databases.

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#38584 - 11/04/02 03:07 PM Re: Privacy Question
SkyDiver Offline
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Northeast
Do you (or anyone)have any additional information on this issue subsequent to the original posting?

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#38585 - 11/04/02 04:02 PM Re: Privacy Question
SJB Offline
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SJB
Joined: Jun 2002
Posts: 1,210
California
You might track down Julie Saville at Star Systems in San Diego. At the recent Cal Bankers Assoc. conference she gave a talk about payment systems and she talked about STAR CHECK and PPS National Shared Account and Transaction Databases. (I don't have her email or phone number, sorry.)
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#38586 - 11/04/02 04:44 PM Re: Privacy Question
SkyDiver Offline
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SkyDiver
Joined: Jul 2002
Posts: 274
Northeast
thanks. Any California bankers on the forum that could possibly provide more information about PPS?

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