Like Chex Systems which warns its members about potential losses when consumers open a banking account, Tele-Check attempts to protect merchants from bad checks from consumers. Tele-Check tries to predict when a consumer might present a bad check for payment. It does not have access to your banking account, nor does it maintain records of other checks you may have written in the past. Instead, as long as Tele-Check has no adverse information about you , your check writing habits or other statistical indicators of check fraud, your check will be approved. So it is the lack of bad information, not the presence of good information that determines whether you are worthy.
What is the benefit of Tele-check to consumers? There is none. The service is designed to assist merchants and others who accept checks from consumers. It only measures the risk that any particular check is fraudulent and the system has no way of knowing with certainty that your check is bad. Instead Tele-check acts more like an insurance policy for te merchant. If the check is approved and it later turns out to be forged, stolen, or with insufficient funds, Tele-Check pays the merchant the amount of the loss. So unlike Chex Systems, there is no credit report that you can obtain to verify that information provided is correct.
