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#1162524 - 04/13/09 07:18 PM Stop payment returns - ACH debits
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
I'm looking for some guidance. Our current procedure is to allow a customer to place a stop payment on a recurring monthly ACH debit and to keep returning the entries as "payment stopped" for up to 6 months. Is this allowed or does the stop payment expire once the first of these monthly transactions is stopped? Should we require a new stop payment (and collect the associated fee) for each monthly ACH debit they wish to stop, thereby encouraging the customer to revoke authorization with the originator.

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#1162663 - 04/13/09 08:57 PM Re: Stop payment returns - ACH debits AuditorK
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
NACHA rules say that a consumer's stop payment on an individual transaction expires when the payment is stopped and returned. However, if the transaction is a pre-authorized EFT from a consumer account, it falls under the stop payment rules of Regulation E, which does not have any expiration provision.

As to whether your customer's stop order applies only to one entry or to multiple entries, that's up to the stop order that your customer issues and you accept. If you undertook to stop all six transactions, that's what you should do. But you would be correct if you insist that an individual stop order address an individual transaction and not a series. I won't address the fee issue.

Then there is the matter of whether the customer actually intends that his or her authorization be revoked. If that's the case, you should hew to the language of the comments to section 205.10(c).
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#1163734 - 04/15/09 03:34 PM Re: Stop payment returns - ACH debits John Burnett
kiemo Offline
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kiemo
Joined: Jan 2009
Posts: 267
MidUS
Normally, when a customer says they want to "Stop an ACH " transaction, you would want to question whether this is a recurring debit (i.e. monthly insurance payment). This will let you know that they really want to revoke authorization for those debits. After they contact the company and cancel their authorization (in manner required by the company) any further debits should be returned as R7 authorization revoked by your institution, not Stop Pay. ACH Rules do not allow that company to sent further debits to that customer without a new authorization. (not to say that sometimes it will take more than one return). Hope this helps to clarify.

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