What Is a Stop Payment and How Does It Work?
Written By
Manoj Prasad
A stop payment is a request to a bank to cancel a check or payment before it’s processed.
It prevents the bank from honoring a specific check or transaction that hasn’t been completed yet.
Stop payments are typically used for lost, stolen, or incorrect checks that need to be voided.
You can request a stop payment in person, over the phone, or through online banking services.
The bank needs specific details like check number, amount, and payee to process the stop request.
Stop payment requests are time-sensitive and must be made before the check or payment is cleared.
Most banks charge a fee for placing a stop payment, which varies depending on the institution.
The stop payment remains in effect for six months unless renewed or canceled by the account holder.
A stop payment does not guarantee reversal if the transaction has already been processed by the bank.
Stop payments can also be placed on pre-authorized electronic payments like automatic bill deductions.
It’s important to double-check all details when requesting a stop payment to avoid processing errors.
Stop payments are useful in disputes where goods or services weren’t delivered as promised.
You must have sufficient account authority to request a stop payment on your personal or business account.
Stopping payment on a check does not eliminate your obligation to pay what you owe legally.
If the bank fails to honor a valid stop payment, you may be entitled to compensation.
Stop payments are not effective on cashier’s checks or money orders once issued.
Written confirmation is often required by banks within 14 days after a verbal stop payment request.
Digital banking apps may allow quicker and more convenient stop payment requests than visiting a branch.
Regularly monitoring your account activity can help detect unauthorized payments needing stop payment action.
Always follow up with your bank to confirm the stop payment has been successfully placed and recorded.