How to Stop Automatic Payments From Checking Account

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Canceling a check or payment isn't always a simple task and requires you to act swiftly once you discover an issue. The process of canceling a check is called a stop payment order. Here's an in-depth look at stop payment orders, how they work, what they cost and when they are effective.

What Is a Stop Payment Order?

A stop payment order is a request to cancel a payment before it's been processed. Payments include personal checks and ACH payments, like recurring monthly bill payments.

There are several reasons an individual might request a stop payment, including:

• Incorrect information on a check
• A check mailed to the wrong address
• A lost or stolen check
• Insufficient funds in a bank account
• A dispute over a purchase or services rendered

How a Stop Payment Order Works

Individuals can contact their banks to request stop payments. After supplying the necessary payment information, the bank flags the check, if it hasn't already been processed, and stops the check from clearing.

Depending on the bank, stop payment orders typically expire after six to 12 months, although many banks allow you to renew a stop payment order if the check is still outstanding. If your bank charges a stopped check fee, they may also charge a fee to renew the stop payment order. Stop payment orders on ACH payments last indefinitely.

How to Stop Payment on a Check

Stopping payment on a check isn't difficult, but there are steps you should take to ensure its success.

1. Take action. It's imperative to move quickly when requesting a stop payment, so you catch it in time. The moment you know there is an issue is the time when you should be working toward a stop payment order.

2. Verify. Before contacting anyone, take the time to access your bank account online or on a mobile device to see if the payment has been posted yet. A stop payment order won't help you if you have a lost or stolen check that has cleared. At that point, you'll need to report a fraud.

3. Gather check info. Your bank will ask for specific information about your check so it can properly track it and ensure it hasn't been processed. Details they might request include:

• Photo identification
• Account number
• Routing number
• Recipient name
• Check date
• Check number
• Check amount

For ACH payments, you may be asked to supply other information, such as company name, account number, ACH merchant ID and the payment amount.

4. Contact your bank. The quickest way to set a stop payment order in motion is to call your bank directly, although you may be able to make a request online or in writing. Some banks may require you to fill out a stop payment request form to start the process.

If you contact your bank by phone, it may require written notification within 14 days, or the stop payment will expire.

Stop payment orders take effect as soon as the bank authorizes your request.

5. Contact the payee. Depending on your reason for requesting a stop payment order, you may want to contact the payee, if necessary, to let them know about the stop payment. Then, you can arrange for a new payment if required.

Stop Payment Order Costs

Issuing a stop payment order often costs the bank account holder a fee for the service. Fees can vary depending on the bank, but most are between $20 and $30 per request. Here's a look at stop payment fees at several popular online banks, along with some brick-and-mortar banks.

Some of the banks mentioned above, like Chase and Bank of America, waive stop payment fees for premium bank accounts. Be sure to check with your bank to find out how much it charges for stop payment fees on your bank accounts. Some banks do not charge a stop payment fee on a lost or stolen blank check.

Do Stop Payment Orders Always Work?

As mentioned above, you have to make the stop payment request before the bank processes the check, and stop payment orders can expire after a set time. If you choose not to renew an order, it's possible that a payment will still get processed after expiration.

It's also possible that a stop payment order gets inadvertently ignored, and your bank processes the payment. If that happens, the bank is responsible for paying back any service charges, including the stop payment fee.

Not all payments are eligible for stop payment orders. For example, cashier's checks and money orders are not eligible for stop payment orders. Because both of these require payment up front, funds are withdrawn from your account at the time they are issued.

Instead of stopping payment, you can opt to cancel a cashier's check or money order, depending on the circumstances. Unfortunately, the cancellation process can take 90 days or longer for cashier's checks and up to 60 days for money orders. You'll also be subject to a cancellation fee in some cases.

Are Stop Payment Orders Legal?

Stop payment orders are completely legal and are offered by most banks and other financial institutions. There are certain situations where it's imperative to stop a payment from going through. Stop payment orders also protect consumers.

Stopping a payment, though, doesn't mean that people aren't accountable if they entered into a contractual agreement that requires payment. While you may have stopped a specific payment, that doesn't release you from any payment obligations. You could be subject to late fees and other negative consequences, including legal action.

The best way to avoid relying on a stop check order is to verify the information on a check or ACH payment is correct before sending it. If you have reservations about a payment or have issues with a payee, communicate that with them before sending payment.

How to Stop Automatic Payments From Checking Account

Source: https://www.forbes.com/advisor/banking/how-to-issue-a-stop-payment-order/

Share this post