What Is a Stop Payment and How Does It Work?

A stop payment is a formal request to your financial institution to prevent a specific payment from being processed. It blocks funds from leaving an account for a check or an electronic debit that has not yet cleared. This service acts as a safeguard, allowing individuals to control transactions before they are completed.

Situations for a Stop Payment

Individuals often utilize stop payments in various circumstances to safeguard their funds. One common reason is when a physical check is lost or stolen, preventing an unauthorized party from cashing it. A stop payment can also be necessary if an unauthorized transaction appears on an account, indicating potential fraud. If there is a dispute with a merchant where goods or services were not received as agreed, and the payment has not yet cleared, a stop payment can be initiated. This also applies to accidental duplicate payments or checks written for an incorrect amount or to the wrong recipient.

Process for Requesting a Stop Payment

Initiating a stop payment requires prompt action, as payments can clear rapidly. Contact your bank by phone, online, or in person. When making the request, specific details about the payment are necessary for the bank to identify and halt the transaction. This information includes:
The check number
The exact payment amount
The name of the payee
The date the payment was issued
The account number from which the payment would be drawn

While some banks allow verbal requests, many require written confirmation within about 14 days to make the order permanent. A stop payment is effective only if the payment has not already cleared. Checking the transaction status beforehand can confirm if the payment is still pending and eligible for a stop.

Key Details and Limitations

Stop payment orders typically incur a fee from financial institutions, commonly ranging from $25 to $35, though this amount can vary by bank and account type. For checks, a written order remains active for about six months, expiring unless renewed. Verbal orders, if accepted, often have a shorter duration, such as 14 days, requiring written follow-up for extended coverage. Most checks and pre-authorized electronic transfers, such as Automated Clearing House (ACH) payments, can be stopped before processing. However, stopping wire transfers or cashier’s checks is often impossible once initiated, as funds transfer immediately. Even if a stop payment is successfully placed, it does not absolve the account holder of any underlying debt or contractual obligation to the payee. Failure to pay through an alternative method could lead to late fees, penalties, or negative impacts on credit.