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Keep Stop Payment Agreement On System Forever?

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Question: 
If our customer has signed our stop payment agreement that states he has notified the Originator that he has revoked the authorization for this item and our form states that by signing the form, he confirms he has done so, does this stop payment have to stay on our system forever?<br/>
Answer: 

In theory at least, yes, if the customer is a consumer. That's because Regulation E doesn't include any reference to expiration dates on Stop payments of preauthorized EFTs. That said, however, it's reasonable, I think, for a bank to weigh the risk involved in taking such orders off their systems after a while. After a year, for example, if there's only been one "hit" and return of an item under the stop (or none), the odds become smaller that there'll be a later submission of an item meeting the definition in the stop order. After two years, the odds get much smaller. Just be aware that, if by some chance the bank ends up paying one of the recurring items at a later date and the customer lodges a complaint, the bank will owe the customer a refund. Of course at that time, if you've received a WSUD from the customer as part of the complaint, you can ship the offending debit back as unauthorized.

First published on BankersOnline.com 2/25/13

First published on 02/25/2013

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