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#1594031 - 08/18/11 11:00 PM Stop Payments
mrSaint Offline
Member
mrSaint
Joined: May 2003
Posts: 71
California
Curious if your bank requires a written confirmation to returned by the customer to the Bank after accepting a verbal stop payment?
_________________________
The opinions expressed are strictly my own and not necessary those of my employer.

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#1594234 - 08/19/11 04:39 PM Re: Stop Payments mrSaint
Al Miller Offline
Diamond Poster
Al Miller
Joined: Oct 2000
Posts: 2,416
Pleasanton CA USA
That is a requirement of the Commercial Code, but that section can be varied by agreement with the customer. If your deposit agreement says that stops are effective for 6-months whether verbal, written, by telephone banking, by internet banking, by facsimile, or by smoke signal, that is what rules.

Al
_________________________
Al Miller, CRCM
Opinions expressed are my own and not necessarily shared by my employer.

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#1594512 - 08/20/11 03:07 AM Re: Stop Payments Al Miller
RayLynch Offline
Platinum Poster
RayLynch
Joined: Oct 2003
Posts: 544
California Commercial Code section 4403 (b) is the source for Al's first comment about written confirmation being required after receiving an oral stop payment order:

(b) A stop-payment order is effective for six months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in writing within that period. A stop-payment order may be renewed for additional six-month periods by a writing given to the bank within a period during which the stop-payment order is effective.

Commercial Code section 4103(a) is the source of Al's second comment about varying the customer's agreement:

(a) The effect of the provisions of this division may be varied by agreement, but the parties to the agreement cannot disclaim a bank's responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. However, the parties may determine by agreement the standards by which the bank's responsibility is to be measured if those standards are not manifestly unreasonable.

You should check with your bank counsel before you vary any terms of your account agreement to insure any such revision is properly disclosed (hopefully not by smoke signal) and doesn't create a potential unfair business practice claim.

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