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Stop Payment: How Does It Work?

Reginald Calaguas, Senior Private Banker, First Republic Bank
June 27, 2022

  • If you made an error on a check or want to cancel a recurring payment, you can use a stop payment order.
  • Stop payment orders are requests you make to your bank to stop payment on a check or automatic debit payment.
  • A stop payment order prevents the payment from going through your bank account.

Have you ever had someone lose a check you wrote to them? Or perhaps you've needed to stop a recurring payment because you're canceling the service. This is when stop payment orders can come in handy. 

A stop payment order enables you to stop a payment from processing through your bank account. You hopefully don't need to request stop payment orders from your bank often. However, understanding when stop payment requests make sense — and what they entail — is important.

Issuing a stop payment order helps ensure that your funds aren't withdrawn unintentionally and gives you more control over your payments. Read on to learn more about stop payment orders and how they work. 

What is a stop payment?

A stop payment is a request from an account holder to a financial institution, such as a bank or credit union, to not process a payment. The payment may be a paper check or an automatic debit payment, like those you set up for a recurring subscription or bill. 

Stop payments must be requested relatively quickly after you write the check or before the payment is scheduled, in the case of automatic debits. That's because your bank may not be able to reverse the process once the payment clears. You'll want to notify your bank as soon as you know you need the payment halted.  

Reasons to stop payment

There are multiple reasons you may need to make a stop payment request on checks, automatic debit payments or other eligible transactions. Some may be simply because of misinformation that resulted in payment to the wrong organization, while others may prevent fraudulent activity. Here are some of the most common reasons for issuing a stop payment order: 

  • The check was lost or stolen: In these cases, you want to stop payment on the original check and send the payee a new one. 
  • The check contains an error: You want to stop payment on the original check so that you can issue a new one that has accurate information.  
  • The check was sent to the wrong address: Stop payment requests prevent a stranger from cashing a check meant for someone else. 
  • You were scammed or subjected to fraud: Perhaps someone promised to sell you something and never delivered the item. You can stop payment so that they don't take your money. 
  • The account holder is canceling a membership or recurring utility payment: Stopping the payment via your bank ensures the payment no longer goes through.  

How to issue a stop payment order

The process of issuing a stop payment order varies based on your bank or financial institution. For example, some banks may require a phone call to provide verbal consent, while others prefer written permission. Some banks may also charge a fee for issuing a stop payment. 

It's important to note that you can only stop payment on checks that haven't been cashed or automatic payments that have yet to go through. You'll want to make the request as quickly as possible and ensure that you make it correctly. 

Contact your bank to learn more about its stop payment order policies, whether it charges a fee to cease payment and what details you need to provide to complete the request. Here are some standard ways you can stop payment on various payment methods. 

How to stop payment on a check

Once you realize you need to stop payment on a check, you'll want to take action as soon as possible. To complete the stop payment order before the check is fully processed, follow these steps: 

  1. Confirm the check hasn't cleared: As previously noted, you cannot stop payment on checks that have already been cashed. 
  2. Gather all the check information: Be ready with your checking account number, the check number, information about the person or organization you were paying, the check amount and check date. 
  3. Contact the bank to place a stop payment order: Follow the process outlined by your bank, whether that's filling out a form or connecting with a bank representative on the phone. 

Once the bank receives the request, it will flag the check and stop the payment from clearing your checking account. 

How to stop payment on automatic debit payments

Stopping payment on other recurring debit payments, like subscriptions and utility bills, is similar to stopping payment on a check. Follow these steps to stop payment on automatic debit payments: 

  1. Confirm the debit hasn't cleared: It's much more challenging to stop a payment after it's already been processed through your deposit account. 
  2. Gather all the payment information: This includes your checking account or savings account number, payee information, the payment amount and the date of the payment.
  3. Contact the bank to make a stop payment request: You need to make the request at least three days before the payment is set to clear. If your bank requires written notification, you may also need to provide that within 14 days of making a verbal request. 

Once the bank receives the order, it will flag the automatic debit payment and stop it from clearing your deposit account. However, the stop payment doesn't eliminate the bill's balance or mean you don't owe a company money.

You may also need to contact the organization to cancel your contract. Otherwise, the company may keep sending you bills. Also, if you cancel automatic payments on a loan, you're still required to make your loan payments. 

What to do after issuing a stop payment 

After issuing a stop payment, you'll still want to monitor your bank statements and transaction history for any potential charges. If your bank still processes the payment, you'll need to dispute the charge. For this reason, it's essential to save any emails or documentation of your stop order request. 

You can contact your bank's customer service team if you need to dispute a charge. If you suspect a charge is fraudulent, you have other options beyond a stop order request. Connect with your bank to see how they handle fraudulent activity and what you can do to remove the charges. 

Other stop payment considerations

Before you decide to make a stop payment order, there are a few things to consider, from possible fees to how long the stop payment requests last to whether they're legal. 

How much are stop payment fees?

In some cases, banks charge a fee for making a stop order request. The fees vary by financial institution, the type of account you have and the payment you're stopping. Stop payment order fees typically range from a few dollars to up to $30. Stop payment requests may also be free depending on your bank. 

How long does a stop payment on a check last?

Stop payment orders aren't permanent. Instead, they usually expire after a certain amount of time. The law requires that banks maintain stop payment orders received in writing for at least six months. After that, the check can be cashed, though many financial institutions don't cash checks older than six months. 

Verbal stop payment orders expire after 14 days, according to federal regulations. However, your specific bank may honor the request for longer. For these reasons, it's important to check with your financial institution about its stop payment policies, so you understand how long your stop payment will last.

Can you stop payment on cashier's checks and money orders?

Stopping payment on a cashier's check or money order isn't usually possible. That's because cashier's checks and money orders work differently from checks. Stop payments on cashier’s checks are handled differently as they are funds guaranteed by the issuing bank.

It's best to ask your issuing bank for their specific guidelines on the stop payment of cashier's checks and money orders. There may be stipulations based on if the cashier check or money order is returned to the issuing bank, or there is a specific period of time before replacement funds are available.

Is a stop payment legal?

Your bank will allow you to stop payment on a check or automatic debit payment. This action is legal, assuming you had enough money in your account to pay for the item and the reasons for stopping the payment are legitimate. 

However, you may still owe the payee money, depending on the circumstances. For example, if you stop payment on a car loan, you may still owe the lender your monthly payments if there is still a balance due. Or if you stop payment on a check for a medical bill, you may still owe the service provider money. 

Also, it may be considered fraud if you purchase items and then stop payment on the checks in order to avoid paying for them. You could face legal consequences as a result. 

Stop payments can help 

Whether you've made a mistake on a check, lost a check or need to stop an automatic debit payment, a stop payment order makes sense. In all cases, you need to move quickly to ensure that you make the stop payment request before the payment processes. 

If you need to make a stop payment order, connect with your bank as soon as possible. That way, you can make the stop payment request correctly and prevent any payment from clearing your bank account. 

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