What is EWS (and what to do about it)
The EWS is known as the Early Warning Services, but you may find it on Google as the Early Warning System. It is a credit scoring company, which is its legal definition, but it doesn’t deal with your credit rating, it deals with your banking history. It was founded officially in 1995 by a small number of banks working together, though their corporate overview says they have been in business since 1990.
The Company Is Owned By Seven Banks
EWS is part owned by seven banks/financial institutions. They are the Bank of America, Capital One, BB&T, JPMorgan Chase, U.S. Bank, Wells Fargo and PNC.
It is not as popular as TeleCheck and ChexSystems, but is still used by over 2300 financial services organizations (FSOs) and over 200 private companies. You may therefore be excused for thinking that the EWS is no big deal and not much of a threat to you. If you manage your bank accounts and store accounts well, then that may be true, but if you do not, then you may be in for a shock.
ChexSystems have been known to use EWS, and may in-fact use it all the time. They have been known to use EWS when looking for background information on a person that doesn’t appear to have much of a banking history. There is also a chance that TeleCheck uses EWS too, but we have no way of knowing.
A Little Background Information
The EWS Company has plenty of advisory committees and executives working for it. They come from FSOs of all sizes. They are the ones that help the company shape their product. They do thing such as point out the newest frauds and online cons. They inform the EWS team on current and emerging threats and solutions.
Just like TeleCheck and ChexSystems, the EWS Company has hundreds of financial companies contributing transactions every day. These contributions are used by EWS to create their reports that are then passed out to their FSO and non-FSO customers.
The EWS Company may only be used by over 2300 FSOs and over 200 non-FSOs, but they still have a database that details the banking activity of over 50% of the country’s eligible banking population. That information is kept secure, while remaining the property of the banks/companies that contribute the information.
The EWS is a consumer-reporting agency that works under the credit scoring laws in the USA. These include the Fair Credit Reporting Act, along with any of its state equivalents. The CFPB regulates their activity (Consumer Financial Protection Bureau), and they are supervised by the OCC (Office of Comptroller of the Currency).
What Should You Do About It?
When the banks start teaming up, the consumer is usually the one that gets the royal screw job. Banks are cruel enough when they are acting alone, but it usually gets worse when they team up. Your best defense is to keep your accounts in order and manage your banking, checking and store accounts as well as you can.
If you have a transaction denied because of EWS, then file a dispute and have it removed from your EWS report. If you manage your accounts well, then the EWS will have nothing to show on your report.
Alternatively, you can just find a bank that does not use EWS. The good news is that most of the banks don’t use EWS, but use ChexSystems. However, if you have a bad EWS record, you may also have a ChexSystems report.
You can try applying online with a bank that does have a reputation for accepting customers with EWS or ChexSystems records. We recommend trying to apply for the BBVA Compass ClearConnect Checking Account. They have a reputation for giving accounts to customers with bad banking history.
You can also see our list of Best Second Chance Accounts, which are accounts for people with EWS, Telecheck, or ChexSystems records.
Are There Any Benefits For The Consumer?
The Early Warning Service is mainly for companies to check up on you to see if you are a viable customer, to see if they should give you an account, and to see if they should accept your checks. The only benefit for you is that they may lower the amount you lose through fraud.
For example, if your checkbook is stolen while you are holiday, then some drug dealer may be having a great time handing out your blank checks to his/her friends. If the EWS gets reports from stores, banks or financial services organization, they may start issuing negative reports. Stores, banks and FSOs will stop accepting your checks, which means the amount of money you lose will be lessened. When you get back from holiday, you may freeze your accounts, file a police report, and regain control of your account. If it were not for the EWS (and TeleCheck, and ChexSystems), you may have lost more money.
You May Obtain A Free EWS Report
If you are denied a transaction because of the EWS, you may request a free EWS report. It will show you what the store or bank saw when they denied you. If the reasons are unfair or because of fraud, then you may raise a dispute and have the blemish(es) on your report removed. If there are no reasons on your EWS, then you may return to the bank or store that denied you and request an explanation as to why they “really” denied you.
For example, there have been occasions where banks have refused to give bank accounts to customer that have no job because they will probably not have much money pass through their account. If you can prove that the bank unfairly discriminated against you, then you may be able to take legal action against them.
Take Action If Your Report Has Blemishes
If your EWS has blemishes that are mistakes, that are unfair, or that are due to fraud, then take action and raise a dispute. If there is fraud involved, then you may also file a police report.
If you do not take action, then to outside observers it may appear as if you were guilty of the fraud, account mishandling, or account misconduct. If there is no fraud, you may still be able to file a dispute and have your blemishes removed for other reasons.
For example, if you paid a bill, but the company claims you didn’t, or that you paid it late, then you may file a dispute and prove to EWS that you paid it on time.
For example, if you overdrew by just a few dollars and it appeared on your EWS report, then you may file a dispute claiming that it was unfair. You may cite other banks and FSOs that do not report such minor infractions.
For example, if a place a check in your account and your bank takes a very long time to credit your account to the point where your direct debit bills come out before you receive the credit, then you may file a dispute claiming that you put the check in long before your bills made you overdraw and that it is unfair.
Need a Bank Account but have ChexSystems problems or Bad Credit?
Try opening a BBVA Compass Free Checking Account! BBVA is one of the more forgiving banks and may give you a full-fledged REGULAR bank account when you apply online...even with bad banking and credit history.
And if you don't qualify for the regular BBVA checking account for some reason, you'll then be given the option of opening the special BBVA Compass Easy Checking Account, an account designed specifically for those with banking problems.
...learn more about BBVA Second Chance Banking here
At the very least, you should try to dispute the blemishes on your account because it is free to do so and sometimes, you are able to have the blemishes removed.