By Solveig Torveig
You think paying by check is the way to avoid credit card fraud — or embarrassments such as that recently suffered by the Leader of the Free World when even his credit card electronically was rejected at a restaurant?
Think again.
It pains me to pen this cautionary tale because it involves Verizon Wireless, provider of such exemplary emergency service during our Carlton Complex firestorm, and foolish confidence by me.
Last month I mailed my monthly check to Verizon, as I’ve successfully done for years on the same checking account. My check was due Sept. 20 and arrived at Verizon on Sept. 15. Funds to cover it were on deposit.
Unbeknownst to me, though, on Sept. 17 something baffling befell my check. However, Verizon didn’t tell me this. Instead it sent e-mail and cell phone messages simply saying payment hadn’t been received. Unfortunately Verizon added: “If you’ve already made this payment in full, please disregard this e-mail.”
I had paid in full, thus confidently did disregard Verizon’s messages. Not until Verizon messaged again saying service would be cancelled did I learn the dumbfounding news: my check had been received — but rejected.
Verizon claimed my bank refused my check. But my bank verified that it never arrived for processing, funds were on deposit to cover it, and that the bank was not contacted. Verizon then revealed it was Certegy Check Services Inc. that had blocked the payment. Say who?
Certegy is a Florida-based fraud prevention firm hired by Verizon to screen customers’ checks. It also collects, analyzes and reportedly sells financial information about consumers. Fittingly enough, until recently it also was a casino and online gambling vendor.
Unverified reports claim Certegy has been, or is, used by such retailers as Macys, Best Buy, Sears, K-Mart, Home Depot, Radio Shack, Staples and Target. Many unverified accounts by consumers claiming
Certegy wrongly blocked their checks languish on line. The West Florida Better Business Bureau’s website says it has received 466 complaints against Certegy.
In a 2013 consent decree, the Federal Trade Commission fined Certegy
$3.5 million for violating the Fair Credit Reporting Act. The FTC said Certegy “failed to follow reasonable procedures to assure maximum possible accuracy of the information it provided [about check writers] to its merchant clients”, “failed to follow proper dispute procedures,” and that some check denials “may have been in error.”
Evidently nothing has changed.
Verizon told me to call Certegy for an explanation. A “floor manager” there said Certegy had no record of the transaction, couldn’t explain why my check was blocked and couldn’t promise the same mistake wouldn’t be made again. Kafka-esque! Yet the FTC had urged “improved transparency of industry practices.”
But wait! If I enroll in its free “VIP” program by sending Certegy a blank, voided personal check and disclose detailed financial information, Certegy’s website says this “may be your ticket to quick and convenient check writing.” May be? Seriously?
The Boston Globe quoted certified financial planner Dolores Kong’s spot-on summation of Certegy’s cheeky ploy: “It’s bad enough worrying about your credit and identity theft problems … Now we have to worry about check approval services that deny without any reason, and then turn around and push a Gold Membership on you so you’re in their database.”
The FTC claims to monitor compliance with its consent decrees. But Katherine Armstrong, staff attorney for the FTC’s Bureau of Consumer Protection, couldn’t say if Certegy has complied. A law enforcement agency, the FTC isn’t in the business of setting accuracy parameters or requiring proof that systems used by these firms are reliable.
Hello? Congress? Anyone awake up there?
But why does Verizon subject its customers to abuse by a firm with such a poor track record? And why did Verizon bill me a $25 “insufficient funds” charge for a check it never tried to cash? (It took 90 minutes of phone hell to get that charge removed.) Inquiries to Verizon yielded no explanation. Could be there’s not much to choose from; the FTC also fined TeleCheck the same amount for essentially the same violations.
Certegy says a consumer’s credit score plays no role in whether a check is rejected. “Decisions are made based on information in Certegy’s check writer database and a statistical analysis of your check compared to all checks that have gone through our system,” its website says.
Huh? “Statistical analysis” comparing my check against others? And exactly how does this reveal what’s in my checking account?
As for “decisions?” Please. Call it what it is: mindless algorithms. It takes a split second for retail clerks to scan your check and get a yea or nay from Certegy. No one’s verifying if you have the money in the bank, which should be the sole criterion.
A request for full disclosure of financial information in my file yielded this written response from Certegy: “No information on file.” So was my check just randomly blocked to establish a robust check-rejection record to persuade merchants to buy Certegy’s service? Who knows?
All I know is Verizon claims the check I sent this month has vanished. “John” in Verizon’s customer service department deserves the last word here. His erroneous — for now — explanation of this month’s check mystery fittingly caps this tale: “I don’t believe we take checks by mail anymore.”
You can file denied check complaints online at ftc.gov/complaints and with the federal Consumer Financial Protection Bureau at consumerfinance.gov.
Solveig Torvik lives in Winthrop.
Solveig Torvik lives in Winthrop.
