ACH debit (PPD - online credit card payment) is presented against customer's account 3 times in the last month. Each time the bank returns it as NSF. Saturday the bank receives a draft for collection in that amount from the same company. Since there are funds available, Monday the bank mails a cashiers check for the amount of the collection item. Monday morning the customer calls the bank to place a stop payment on the item. The item is paid despite the customer's notice because the stop payment wasn't entered on the system. Can we rely on a defense that we received the item for collection prior to the customer's stop payment request - received Saturday even though the cashiers check wasn't mailed out until sometime on Monday?

Consider it this way, if I wrote a check to Joe Shmoe on Friday and he comes in on Saturday and cashes it (funds are available) then I would not be able to place a stop payment on the check Monday morning.

Another way to consider it -- what's your liability? The customer received value in the form of credit to his credit card. His damages for payment of the check are $0, unless (and this could be big) you bounced other items that would have been paid but for paying the stopped item.