Being listed in a bad-check database may prevent a consumer from being able to use checks for purchases in the future; may cause the bank on which the bad check was drawn to close the account; and may prevent the consumer from opening a checking account at another financial institution for years, as explained by HG.org. Ultimately, the consequences depend on the reporting rules used by the particular database and on who has access to the information.
The most widely used bad-check database is Chex Systems, which provides information on mishandled checking and saving accounts to about 80 percent of U.S. banks, as of 2009, according to ConsumerReports.org. The database keeps track of the bad check amount, who was stiffed, and whether the delinquent amount was ever paid. The reporting agency keeps this information on file for five years, so banks may not allow the consumer to open another checking account while the negative report is active, especially if the amount has not been paid.
TeleCheck is the other widely-used bad-check database, with participation by more than 350,000 retailers, financial institutions, grocery stores and other outlets, as of 2009, notes ConsumerReports.org. Retailers typically decline to accept checks from consumers with bad reports in Telecheck, which remain on the record for seven years.