Online Stop Payments

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Question:

We are converting to a new internet banking program and would like to offer customers a function that would allow them to place a stop payment online. We will have "real time" capabilities so the stop would go on to the Core system. My question is this, an oral stop payment is only good for 14 days and requires a customer's signature on a stop payment request to maintain the stop for 6 months. How are stop payments which are entered by customers themselves on the internet to be treated? Does the fact that the customer signed on to the secure site and performed this function themselves suffice, or do we need to send out and obtain a customer's signature on a "paper" stop payment order?

Answer:

Two issue are at play here. First, the E-Sign rules allow electronic signatures which can be as simple as "click here." Yes, that can be an electronic signature. If you and the consumer have agreed to the E-Sign rules this can be valid. Secondly, most UCC rules (see your state's for details) allow that variations of the UCC are acceptable. You could therefore, opt to not require a written verification if that is your desire. The customer has already provided a username and password as well as potentially some other layer of protection you may have in place (multi-factor authentication procedures) so you have reasonable assurance who this person is.

First published on BankersOnline.com 6/19/06