SCAN Checks, Payday Loans, and Why You Should Be Worried
February 3
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SCAN reports bad checks by Pete Low

Just a heads up, if you're thinking of getting a payday loan. Especially if you're thinking of getting a payday loan and skipping out on it.

We got a new toy at work yesterday.

Some payday loan places are plugging into SCAN.

What does that mean to you? Well, normally payday loan places report to Teletrack or similar companies that keep track of defaults on payday loans, car title loans, pawn shop loans, rent-to-own defaults, things like that. Payday loan companies may also report to ChexSystems or Telecheck, which keep track of checking account problems for banks. Payday loan places won't usually report to the big three credit bureaus, and most of them didn't used to report to SCAN, even if your check bounced when they tried to cash it.

Well now, if they sign up with SCAN, the information gets sent to all of the retail stores who use SCAN. There's thousands of 'em. If you get a payday loan and give a check dated for your payday, and your check bounces, all those stores will be told.

Here's What Will Happen

Remember when you go to the grocery store or Walmart or Sears and hand them a check, and they run it through a little machine that sucks it in and spits it out? That's the SCAN network. Shared Check Authorization Network. What that little machine is doing in those few seconds, is scanning your check and comparing it to all the names in the SCAN database. If you've written a bad check, it'll notify the cashier right then, refuse the check, and you'll get an 800 number to call. When you call, SCAN will tell you that you'll only be removed from the system after you pay the bad check and request that whoever reported you remove the report.

If a check bounces, SCAN gets your name, social security number, bank account number, address, driver's license and other stuff. So it's not as easy as just opening a new checking account.

There are hundreds of stores that use SCAN and similar reporting agencies: Walmart, K-Mart, Walgreens, Target, Home Depot, all the big ones. Banks are on it too, so they won't let people who write bad checks open new accounts. And now, some payday loan places are getting involved.

Payday loan companies aren't so much interested in using it to turn you down for a loan. This is supposed to be a great collection method for them. If your check bounces, they report you to SCAN. Next time you write a check to Walmart, the little machine rejects it. No soup for you. There you stand at the register in front of everybody, all your stuff on the counter, scrambling to find enough cash or a credit card or something to pay. You get handed the 800 number, go out to the car and call, and they tell you that if you pay back such-and-such payday loan company, your name will be removed from the list and you'll be able to buy things at all the stores again.

Pretty scary, huh? My boss is happy. "People will call us, begging to pay us," he says. Okay, yeah, that's probably true.

My advice? Plan things so that you can pay back the payday loan on time, because you don't know which payday loan companies have SCAN now, and which might get it in the future.

My further advice? Lean in real close. I'm going to whisper this. You didn't hear this from me. Get a debit card for your checking account. Use that at the store instead of writing a check. SCAN will never know.

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10:23 p.m. February 3
i was overdrawn on my account and the store called me and i paid it back, so i called scan and said to take me off their list, but they didnt do it. i sent them the bank statement showing i paid it and they never wrote back. its been two months and i cant get them to take it off


10:54 p.m. February 3
The request to take it off has to come from the store. Spend your time hassling the store and make sure they contact SCAN and request that it be removed.


9:15 a.m. February 4
How do you find out if a payday loan place is using SCAN?


10:33 a.m. February 4
No way to know, except maybe ask and see if they'll tell. Most don't yet, I'd guess, but I think it's coming. It's cheap for them, like thirty bucks a month, not going to break the bank. However, since SCAN is for checks, I'm not sure if it can be used at all by online payday loan companies that just use a direct ACH transfer instead of a post-dated check. You might be safe there. Don't know.

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