Stop Payments on Checks Issued by Bill Payment Systems

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Question:

Should a request to stop payment on a check issued through a bill payment system be handled the same as a normal stop payment request or are there other considerations?

Answer:

It should be handled with additional procedures in mind. You have to know when it was received and how long it should take to be effective. If your deposit agreement says that a stop payment order will take effect within a reasonable time of its delivery, define this. What if you receive the request via e-mail sent by the customer Friday at 9 PM. You may have it on your server at 9:01, but was it "received" at that time, when it is read or when it is read and forwarded to the correct department that doesn't open until Monday morning? What if the check being stopped was negotiated over the weekend? Unfortunately there are more questions than answers while this technology is still in its infancy. You can only anticipate the scenarios, determine the level of risk you will accept and mitigate that which you won't.

First published on BankersOnline.com 3/19/01