The negative ramification of being in the early warning system (EWS)
Early Warning System or EWS does pretty much what ChexSystems has done in the past, but it does it better. ChexSystems has made a name for itself by keeping people out of banks due to poor bank credit history. EWS is the newer database that also keeps track of this same information. Entries with EWS generally mean that most banks will deny your application to open a checking or savings account. In short, if you’re in the database, you probably had excessive overdrafts or bounced too many checks.
So what’s the bad news? ChexSystems and EWS now collaborate and share information. Previously, one could be on ChexSystems but still find a banking institution that did not use ChexSystem reports. Banks that didn’t use ChexSystems began offering second chance bank accounts, but these days are fading fast. The brainchild of Bank of America, BB&T Corporation, JPMorgan Chase, and Well Fargo, EWS monitors fraudulent activity and account abuse, as well as providing a way to verify identity and prescreen applicants for new accounts. In other words, the EWS is a first-line defense against consumers with a history of abusing credit privileges.
So where does EWS get its information from? Can it be challenged? EWS obtains your information from various financial institutions. Like the three major credit bureaus (Equifax, TransUnion, and Experian), EWS is a credit monitoring agency. This means that there is a report associated with your identity. If you have recently been denied an account at a financial institution, it is imperative to request information from EWS. Initial requests are taken over the phone at the EWS Consumer Call Center by dialing (800) 325 – 7775.
So now that you know you’re in the system, what’s next? The negative ramifications of being in the Early Warning System are many. The first thing you will need to do is find an alternative way to receive and spend your money. There are several options available, but each comes with drawbacks and costs for using a product or service. Prepaid debit cards or secured credit cards may be an option; However, the EWS doesn’t just track bank fraud, it also tracks your spending habits. If you are perceived to be a fast and heavy spender, you may have difficulty using certain prepaid or secured cards. In addition, you may have other lines of credit reduced or suspended based on a trigger in the system.
The next option is to use an online payment processor like PayPal. There are fees associated with sending and receiving money, but it’s a small price to pay for having a means of securing your money. To regain your good financial name, you’ll need to carefully review your credit, ChexSystems, and EWS information. Dispute inaccuracies and work with creditors to pay the debt on time. In the future, be sure to pay all creditors on time every time, and always live within your means.
