Our customer put a stop payment for a specific amt. on an Ins. Ach Draft in May. He "says" he notified his agent on his intent to cancel because the premium was going up. But he did not notify us the amt. was going from around $100 to over $900. He was charged the $900 premium from June til Nov. when he came in and notified us we were not supposed to be charging his acct. We filled out an ACH affidavit and returned the two premiums in the last 60 days with an R10 code. He thinks we should write the company and give him his money back. Who exactly is at fault here? The bank, Ins. agent, or the customer who just now got around to looking at his statement. We treated it as a REG E Dispute and have credited him with two mnts. premium.

Did he sign the stop payment? Whatever is on that notice is the information that he agreed to.

A stop payment order operates to stop only one transaction. That would be the next transaction after the stop was placed, and the bank should only be expected to catch it if the dollar amount was accurate.

Reg. E's commentary says:

Once a financial institution has been notified that the consumer's authorization is no longer valid, it must block all future payments for the particular debit transmitted by the designated payee-originator. The institution may not wait for the payee-originator to terminate the automatic debits. The institution may confirm that the consumer has informed the payee-originator of the revocation (for example, by requiring a copy of the consumer's revocation as written confirmation to be provided within fourteen days of an oral notification). If the institution does not receive the required written confirmation within the fourteen-day period, it may honor subsequent debits to the account.

One key question is whether the customer told the bank that he was revoking the insurance payment authorization. If he did not, the stop was valid only for that one transaction, unless your paperwork or contract committed you to stopping all transfers from the company.

The customer told the officer that he was going to cancel the insurance. The officer told him that he needed to contact the insurance company. The customer has claimed to have contacted his agent, but isn't real sure!?! So who knows. The customer did sign the stop pmt. order for the original specific amt. from that company.