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    11 Replies Latest reply on Jul 9, 2008 4:57 PM by jtconsultants

    Problems Getting a bank account for new startup

    jtconsultants Newbie

      Hi all:

      Does anyone have any advice on how to get off of chexsystems? I had some problems in the past with a personal checking account while I was going through a difficult time. I am now back on track and in the process of starting my own business and would like to get a business account but I'm not sure if I can get one. Any ideas? I don't want this to stand in the way of my goals. Thanks everybody
        • Re: Problems Getting a bank account for new startup
          mademan24 Adventurer
          JT-----Where are you from (what state) ? Have you paid off your old checks that got you into chex systems in the first place ?

           

           

          Cheers,

          T.Michael
          • Re: Problems Getting a bank account for new startup
            amspcs Ranger
            FYI, if anybody would like an explanation of what Chexsystems is, please read on.

            I know the banks won't appreciate this description,but it's basically an industry 'black list' the banks refer to
            in order to avoid 'undesirirable' customers. All or most of the banks have banded together (conspired?) to prepare this list. Basically, if someone sticks a bank with unpaid fees, that bank submits that person (via name, SS # and whatever) to the 'black list'. So if the offending person tries to just walk away from Bank A and open up a new account at Bank B, Bank B will run a search on the blacklist and if the name of the potential customer pops up, Bank B will refuse to open a new account until the customer does whatever is necessary (usually pay what he/she owes to Bank A) to get their name off the list.

            Incidentally, there is a version of this system within the bankcard (i.e. credit card processing) industry as well. It's known now simply as the 'match list', previously the CTMF (Combined Terminated Merchant File). It works much the same way as the Chexsystem. If a merchant tries to stick a processor with unpaid fees (or is involuntarily closed down for fraud or other serious violation) and gets placed on the Match List, that merchant is going to find it virtually impossible to get underwritten by any other USA processor, essentially putting that merchant out of business. In fact, most processors routinely run match profiles at random times, so even if the match isn't picked up initially, even if it comes across after the merchant has been approved and begun processing, that merchant will be abruptly shut down instantly. You can't run and hide.

             

            AMSPCS
            amspcs@juno.com
            www.MerchantServices-help.com
              • Re: Problems Getting a bank account for new startup
                jtconsultants Newbie
                any help for getting off of chexsystems if you were vicitim of the nigerian scam about 4 years ago. Never got any money from the bank but you've been blacklisted as suspected fraud?
                  • Re: Problems Getting a bank account for new startup
                    amspcs Ranger
                    I suggest you consult an attorney if you feel you are being unfairly treated..

                    AMSPCS
                    • Re: Problems Getting a bank account for new startup
                      mde313 Newbie
                      Well the quickest way is to pay the outstanding amount, if any. Of course this may not be possible for you or palatable considering you had been scammed. I'm sure you have already beaten yourself up plenty (metaphorically speaking) already, however if you are going to get into business for yourself you should develop a healthy sense of skepticism in money matters.

                      Assuming you have already gone to a bank and discussed your situation, preferably with any proof such as a criminal complaint etc. and have not been successful there are some other things to consider.

                      • See if someone you trust explicitly (spouse or relative) will open the account with you and agree to be responsible for it. keep in mind if you set it up as a joint account they have full access to the funds.
                      • If a partnership see if your partner can open the account and then add you on to it.
                      • Consider incorporation, as a start-up most likely an S-Corporation. While not too difficult to do by yourself, naturally I would recommend professional advice in doing this (lawyer, accountant) if you are not certain of how it is done or operates. A corporation is a seperate entity from yourself, even if you own it fully. You will need to obtain an EIN number from the IRS. You may also want to seek advice from the Small Business Administration and also the Service Corps of Retires Executives (SCORE). The last two I would advise you to look into when starting any business.
                      If and when you do get a bank account make absolutely certain that you are fiscally responsible in it's use. This is important in building and maintaining a ongoing financial relationship with your bank. This wail not only help in banking matters but also in credit matters if and when you seek any form of financing or loans.

                      Wishing you success,

                      Mike
                      1 of 1 people found this helpful
                        • Re: Problems Getting a bank account for new startup
                          amspcs Ranger
                          Much of what the previous poster says is true. However, be aware that if YOU are on the Match List, getting a friend or relative co-signer won't help you. They'll make the match via your business name, personal name, address, social security number, and any other different ways. Bottom line: If you are on the match list, any business associated with your name will not be considered for a merchant account.

                          Your best bet is to face the situation head-on and fix it once and for all, not let it fester for the remainder of your business life. If you are unable to negotiate something with the bank, then I say again, you best bet is to consult a good lawyer.

                          AMSPCS
                            • Re: Problems Getting a bank account for new startup
                              jtconsultants Newbie
                              thanks all for all the good advice. I have tried to talk to a branh manager but it was a no go. I haven't consulted an attorney yet, but that it worth the shot. Something has got to give!! my goal is to fight this thing head-on. Because I want to move forward and although I might have made some mistakes in the past, I want to be taken seriously as a legit entrepreneur. Thank you all I think I'm on my way!
                      • Re: Problems Getting a bank account for new startup
                        smallbizchamp Newbie
                        Have you tried explaining the situation to a local branch manager. They will have the authority to override check systems. They will probably base that decision on the amount of money you open your new account with, how much you owe the other bank, and whether or not you have made arrangements to pay your old debt off. Keep trying someone may take a chance on you