By Jim Donovan

By Jim Donovan

PHILADELPHIA (CBS) — You’ve heard of credit reporting agencies, but did you know there are companies tracking your banking history?

As 3 On Your Side’s Jim Donovan reports, if your record isn’t good, you could end up literally blacklisted by banks.

In order to pay her bills Natasha Carmon drives to each business, goes inside, and pays cash.

“It’s definitely frustrating,” says Carmon.

She’d rather pay by check.

But when she tried to open checking accounts at several banks she was turned down.

“They all denied me and they all said that it’s because you owe this bank ‘x’ amount of dollars,” explained Carmon.

She says four years ago she was hit with a bank fee.

And when she couldn’t pay it, the charges piled up and her account was closed.

“The fees just got so extreme that I couldn’t keep that up,” Carmon said.

Unpaid fees and involuntary account closures are just some money mistakes banks and credit unions may report to two tracking companies.

Those companies are ChexSystems and Early Warning.

These consumer reporting agencies receive information about people who have had financial mishaps or even fraudulently bounced checks.

So before they approve a new account, many banks check your past records.

“It’s a good indication of whether the person can manage the account and what risk they present of causing the bank to lose money,” says Nessa Feddis of the American Bankers Association.

An FDIC survey reveals 65% of banks deny checking accounts to people with prior mismanagement in their consumer reports.

“A consumer who bounced a check once is not a deadbeat, a consumer who bounced a check once may not even have made a conscious mistake,” says Ed Mierzwinski of the consumer advocacy group U.S. PIRG.

Consumer advocates worry that banks are blacklisting people whose record was flagged by accident.

“There could have been an automatic payment that the consumer had cancelled but the company, by mistake continued to try to take out of their account,” said Mierzwinski.

Federal law says you can request a free banking history report each year and dispute incorrect information.

As for Carmon, she says she’s going to have to keep hitting the road to pay her bills.

“Until I can find a bank who is willing to give me a banking, a checking account, then that’s the option that I have,” she said.

The American Bankers Association says banks don’t report you if you overdraw your account but take care of it.

When you don’t pay the overdraft fee though, that could cause you to have trouble getting accounts in the future.

Now some banks offer alternative “cash only pre-paid card” accounts for people who can’t get traditional accounts

We’ve set up links to find out how you can get your free banking history report here on our website.

For more information, visit the links below:

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