Our form states that if the consumer does not indicate on the stop payment request form that the item is a converted check, we will not stop payment on it if it comes in as a converted check. Are we permitted to to refuse to stop payment in this this instance?

Also,I believe that converted checks fall under the ACH rules, but want to make certain.

Thank you all for your help

Converted checks do come under the ACH rules, and those converted to ARC, POP or BOC Entries are also subject to Reg E when they affect a consumer account. RCK (Re-presented check) Entries remain subject to UCC rules and ACH, but not to Reg E.

As for the stop payments, in many cases your customer won't know for sure whether a check conversion has taken place. That is one reason that extended return deadlines apply to ARC, BOC, POP and RCK Entries.

Frankly, if a stop has been accepted on the original paper check, there is no authority to pay the derivative ACH entry.

Thank you very much for your help, John.

Have a great day.

As John mentioned, the customer may not know of the conversion. Accordingly, when many banks accept a stop payment on a check, they put it on the ACH system too.

I'll be talking about stop payments in my Webinar this Thursday, April 10. Scroll up and you'll find a link in the Upcoming Webinars list to the left of the posts.

Thank you!