Uh-oh. You wrote a check and mailed it, but the recipient didn’t receive it. You’re worried that the check was lost in the mail or stolen. Or you wrote a check and realized too late that the amount was incorrect. When a check is lost, stolen or includes an error and you want to prevent it from being cashed, you must notify the bank to put a stop-payment order on it. Depending on your bank, you could be hit with big fees and you may not even have a guarantee that the check won’t be cashed.
How to Stop Payment
Call your bank to find out their requirements for stopping a check. The bank may need a letter that includes your name and address, your account number, the number of the check you want stopped, the check amount and the payee’s name. Ask whether the bank has a time limit on how long the stop order lasts and also ask about the fee. Check your bank’s website to see if the stop-payment order can be done online. When payment is stopped on a check, the recipient’s bank sends it to your bank and it is denied. If the check has already been paid, a stop payment is moot.
Banks typically charge fees up to $30 for each stop-payment request. As of June 2012, Bank of America charged $30 for each request or renewal. Chase charged $30 per item or $25 if the stop payment was requested online or by automated phone system. Citi charged $30 for each stop-payment request whether for a single check or series. Wells Fargo charged $31. TD Bank charged $30. The lowest fee among the surveyed banks was at Ally, where the fee was $15. Fees were generally waived for premium accounts.
How Long the Order Lasts
Of the banks surveyed, a stop-payment order lasted for six months and must be renewed for an additional fee. The exception was TD Bank where the order lasted for one year.
According to the Comptroller of the Currency, if a stop-payment order is properly recorded but the bank cashes the check anyway, the bank could be liable. A stop-payment order must be confirmed in writing or it will lapse after 14 days.
The Uniform Commercial Code states that a stop-payment order stays in effect for six months and may be renewed for additional six-month periods. The code places the burden on the customer of establishing loss from a payment that was made despite a stop-payment order. The code also states that a bank isn’t obligated to pay a stale-dated check that is submitted more than six months after the date on the check, but the bank can still charge the payment to a customer’s account after that for “a payment made thereafter in good faith,” meaning that the customer’s account can still be charged after six months.
E-Checks and Cashier's Checks
Preauthorized payments, such as regular monthly payments to a third party, can be stopped by notifying the bank at least three business days before the electronic payment is scheduled, according to the Comptroller of the Currency. You can call the bank to make the stop-payment order, but the bank may require that you follow up with a written notice within 14 days. Without written confirmation, the verbal stop-payment order will not be effective after two weeks. Online bill payments that have already been paid can’t be stopped.
A cashier’s check is drawn from the bank itself, rather than from your personal account. Banks must honor such a check when the holder presents it. The bank can’t revoke the check by stopping payment; the issuer must make the payment. If the check has not been presented within 90 days, the bank must reissue the check.
Stopping payment on a check in order to avoid paying for merchandise or any other debt is considered fraud, a criminal act. (See Reference 6)
- LawProfessor: Stop Payment on Check
- Bankrate.com: Stopping a Check Payment is Expensive
- Comptroller of the Currency: Answers About Stop Payment Orders
- Cornell University Law School: Uniform Commercial Code
- BankersOnline.com: Stop Payments On Official Bank Checks
- USLegal: Stop Payment Law & Legal Definition
- Jupiterimages/Comstock/Getty Images