For years, we have been accepting stop payment on ACH items. They have always expired in 6 months, unless the customer told us otherwise. For example, if the customer placed a $538 stop payment order on an ACH item scheduled to come out of their account, we would stop that item, plus any others for that amount to that payee that were presented during this 6 month time frame. My ACH expert is telling me that once we return the initial item with an r08 code, we should delete the stop payment. This is because stop payment orders on ACH items are for one item only unless the customer indicates they have revoked the authorization with the company and completed a WSUPP form. Then, we need to make sure and return it as a stop payment with an R07 code. Her fear is that a customer will want a one-time stop, we will return a 2nd identical item and then be potentially liable for any damages to the customer for dishonoring. Our stop payment orders have language "This stop payment order is effective only against the ACH/EFT transfer that is described above and does not cancel or revoke my authorization for future ACH/EFT transfers by the same originator. This stop payment order is effective for six(6) months only and will expire automatically at that time unless I have specifically renewed it in writing prior to expiration."
Any guidance on the rules or how other banks handle this would be appreciated.

According to NACHA rules, a stop pay is only a one-time thing. If the customer wants to stop it forever, that is a revocation of authorization. They need to contact the originating party.

A WSUPP is not required for either a R07 - Authorization revoked, or an R08 - Payment Stopped. If the customer does a stop payment, it is a one-time stop, and only one time. An authorization revoked is another matter, as the customer has come and told you that the authorization is no longer valid. Howver, they must also notify the originator of the debit, which your bank has no control over.

I have seen banks handle R07 in 2 different fashions. The first is to flag the account so no other transactions of that amount can come out - this is okay for odd dollar items, but if the debit is a satndard figure, could present problems. The easier way to handle it is to let the customer know that they have 15 days from statement date to notify you to return it. This places the burden on the customer to review their statement in a timely manner, and takes the liability from your bank.

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A WSUPP is not required for either a R07 - Authorization revoked, or an R08 - Payment Stopped.

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Although, it's not for an R08- It is required for an R07 (OG79 in the NACHA rulebook...at least in mine )

"The request must be made in writing within fifteen days after the RDFI sends or makes available to the Receiver information pertaining to that debit entry. The Receiver must also provide the RDFI with a written statement under penalty of perjury stating that the authorization for the debit entry was revoked by the Receiver. The RDFI must return the rescinded transaction to its ACH Operator by its deposit deadline for the adjustment entry to be made available to the ODFI no later than the opening of business on the banking day following the sixtieth calendar day following the Settlement Date of the original entry. (Does not apply to POP, Single WEB, or TEL entries)"

If I have a customer that comes in and says that they revoked the authorization, I make sure (for their benefit) they contacted the merchant, have them fill out the WSUPP, notate when they revoked the authorization and return the entry. I've only had one instance where an ODFI requested a WSUPP form.

Then, we'll block the the entity by using the stop part of our software using the company id. If anything comes through, we'll still return R07 but then we might report them for a possible violation. That's the plan...I haven't seen it happen yet though. I probably jinxed myself though.

Dang - my bad...don't know how I overlooked that one. Thanks

Hey, no problem. That's why we come here... we need to keep our stuff together. We can't be expected to remember EVERYTHING. It's impossible. No matter what those compliance geeks tell us. haha.