In 1993, the American Bankers Association and the National Retail Federation sponsored an inter-industry task force known as the BankCheck Fraud Task Force to examine solutions to check fraud problems. The Task Force has developed a data sharing program for closed accounts. This program prevents people who have outstanding checks due to retailers from opening new accounts.
Participating financial institutions report all checking accounts closed for cause to a central database called ChexSystems. ChexSystems transmits the closed account information to the shared check authorization network (SCAN) database. Participating banks use the SCAN information before opening new accounts to spot repeat offenders. A participating bank also can use MICR information from a check presented with the applicant's drivers license number to check the SCAN file for any previous bad account activity.
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