Does Section 4-403 of the UCC apply to ACH? I have read and read the NACHA Rule for this and Reg E. They both say that you may.
I know this is a basic question but can someone explain stop payments that are subject to Reg E?
Can you provide an interpretation of Reg E Section 205.10? It states, "the financial institution must honor an oral stop-payment order made at least three business days before a scheduled debit. If the debit item is resubmitted, the institution must continue to honor the stop-payment order". It further states under revocation of authorization "once the financial institution has been notified that the consumer's authorization is no longer valid, it must block all future payments for the particular debit transmitted by the designated payee-originator." Is the bank covered if their policy is to place a stop payment for a specific time frame? Is the bank required to block all similar transactions (same originator not necessarily the same amount) indefinitely?
My question is regarding Reg E concerning the placement of stop payments on ACH items. I was told that stop payments need to be placed indefinitely. I would think this would be up to the customer. Why would it be regulation to place a stop indefinitely without a known dollar amount, especially if you continue business with the payee? If the amount is not available all transactions from the payee will be returned. How true are these statements concerning stop payments on ACH transactions?
A customer has a monthly insurance premium set up to automatically be debited from his or her checking account. The customer comes into the bank and wishes to place a stop payment on the ACH draft. If we load a stop payment order to their account, what should our expiration date be? Our normal expiration date on a check is 6 months. Our deposit operations department seems to think we can only guarantee a stop payment on a draft for 1 month. Is this correct and what regulation answers this question?
We are converting to a new internet banking program and would like to offer customers a function that would allow them to place a stop payment online. We will have "real time" capabilities so the stop would go on to the Core system. My question is this, an oral stop payment is only good for 14 days and requires a customer's signature on a stop payment request to maintain the stop for 6 months. How are stop payments which are entered by customers themselves on the internet to be treated? Does the fact that the customer signed on to the secure site and performed this function themselves suffice, or do we need to send out and obtain a customer's signature on a "paper" stop payment order?
We have a customer who is repeatedly wanting to do stop payments on numerous ACH items, such as quick pay day loans. This customer says that these items are not authorized, but is claiming this every two weeks when they are memo posting to her account and making her overdrawn. What are the rules surrounding a situation like this? Can we refuse to do stop payments all together for this customer on this type of items?
We recently had ACH training and found out that according to NACHA rules, we were doing stop payments incorrectly for ACH items. Are the NACHA rules the only governing force for ACH transactions, or is there some overlap with Reg E? Before we change our internal policy we want to be sure that strictly going by NACHA rules won't have us violating Reg E.
Our bank customer got "phished" and his Internet authorizations were compromised. Thieves used his password to access our website and the customer’s account info and they initiated instructions for the bank to issue checks (probably to an accomplice). These checks are vendor checks. The payee cashes them at any check cashing business. When the customers realizes the suspicious activity and notifies bank, we place stop payment orders on the vendor checks but only after some have been cashed by the payee/accomplice. The check cashing business made a demand on the bank for the funds. Who bears the loss and is there a UCC or CFR provision that addresses this issue?
If a check is issued to a retailer who converts it to an electronic entry and the customer wants to place a stop payment on the check, which stop payment form should be used - a check stop payment form or an ACH stop payment form?