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Stupid Fee Tricks

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Can we charge a fee to our customer for a stop payment involving an ACH transaction they would claim to be unauthorized?

I am not aware of any law or regulation that addresses the issue directly, but am comfortable saying, "No."

First, Regulation E is pretty specific about how complaints regarding unauthorized transfers are handled. The consumer's right to have the complaint handled according to the regulation could not be conditioned on payment of a fee.

Second, your TISA disclosure would have to disclose a fee for processing a claim of unauthorized transfer. Real stop payments are placed on items the customer clearly authorized, but changed his mind about. The consumer is expected to describe the item adequately, whether it is an EFT or a check, and the stop payment must be issued prior to the item's presentment.

By comparison, an unauthorized transfer has already been debited to the account before the consumer is even aware of its terms or existence. Calling the reversing entry a "stop payment" is at odds with the facts...

Reading between the lines, if you have customers repeatedly making such claims and you do not believe them, suggest they might be happier banking elsewhere.

Editor's Note: The title to this Q&A is mine, so don't blame Ken. Bad fees lead to big suits and burdensome legislation.

First published on 4/01/02

First published on 04/01/2002

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