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Stop Payment on a Money Order?

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Question: 
Can we place a stop payment on a Money Order? I said as long as the customer signs an affidavit, the bank should be covered. Am I right?
Answer: 

There are two distinct types of money orders: bank money orders and personal money orders. Personal money orders are money orders that bear the customer's signature. A personal money order is the equivalent of a one-shot checking account and a bank can allow acustomer to place a stop payment on it.

The other kind is the bank money order. A bank money order is signed by thebank and is therefore a direct bank obligation. If the money order is signed bythe bank and drawn on the bank, it is the legal equivalent of a cashier'scheck. If it's signed by the bank, but drawn on an account maintained by thebank at another institution,, it is the legal equivalent of a teller's check. Abank should generally NOT put stop payments on these items.

If you do issue personal money orders, it's always a good idea to have the money order filled out at the time of purchase, if possible, so that you have enough information for the stop.

First published on BankersOnline.com 3/5/01. Edited 3/8/01.

First published on 03/05/2001

Last updated on 03/08/2001

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