What Are Some Reasons a Check Can Be Denied by TeleCheck?


Quick Answer

Reasons a check can be denied by TeleCheck include too many risk factors, identification problems, previous history with TeleCheck and unpaid debt, explains Rebuild Credit Scores. A person could also be denied because of cashier error, fraud and insufficient information in the check writer's file.

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Full Answer

When a merchant submits a customer's check through TeleCheck, the check is analyzed and reviewed for a number of things including fraud, unpaid checks and other risk factors that present a red flag for the merchant, says Rebuild Credit Scores. The TeleCheck system may also verify a paper check and turns it into electronic versions, notes First Data. When the cashier runs the paper check through the system, it produces a receipt that's similar to a credit card signature receipt. The check writer then signs the receipt to authorize the transaction.

TeleCheck helps merchants streamline the check-cashing process for by presenting the check electronically, explains First Data. The system also helps the merchants decide whether or not to accept the check based on certain information and data about the checking account. If the account history shows outstanding debt or signs of fraudulent activity, TeleCheck may decline the check. This is a way to ensure protection for the business against accepting a bad check that is unlikely to clear.

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