Question: We're trying to streamline our stop payments. At the present time, if a stop is called in and we don't get written confirmation within 14 days, we take off the stop. It would be simpler and eliminate the checking if we just leave it on whether or not we get the confirmation. Is there any problem with that?
Answer: There could be. If your stop payment form definitely states that it is only in effect for 14 days unless confirmed, you better keep checking.
Let's say I sent a postdated birthday check to one of my kids in college, and she calls to tell me she remembers getting the check, but she lost it. I call you and put a stop on the check. A few days later she calls to tell me she found it - she was using it for a bookmark! The confirmation arrived in the mail, but by the time she will be able to cash the check, it will be past the 14 days. "No problem," I think to myself. "The stop payment will drop before she can cash the check. I just won't confirm the stop." She cashes the check on her birthday at the college book store ... well past the 14 days - and you return it payment stopped. That is most definitely a problem! At the very least, it is wrongful dishonor of the item in question. And, to add insult to injury, I bet you charged me for the stop!
We've discussed before in the HOTLINE the change many financial institutions have made on their mailed stop payment confirmation informing the depositor that UNLESS contact is made either correcting or canceling the stop payment, the stop payment is considered to be verified and in effect as per the information on the form. You'd be safer going that route to eliminate/simplify your stop payment procedure. Several banking attorneys who have reviewed this method find no fault in it.
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