Reason code 3 in Certegy's check codes means that the payment system flags a transaction for notice because the check originates from a suspect banking institution or from a country that has a lot of check fraud, notes Strong Estate. Certegy is a check-authorization service used by merchants.
Check-authorization services such as Certegy prevent check fraud, claims Strong Estate. The system allows merchants to stop problem transactions before they happen. To operate equitably and in accordance with law, such systems rely on accurate consumer information.
Certegy has had problems with this, reports the Federal Trade Commission. According to a 2013 settlement agreement, Certegy has to pay $3.5 million in penalty for using inaccurate data about consumers and failing to adhere to proper dispute-resolution practices.