Wells Fargo Customer Learns $6,700 Lesson: Stop-Payments Don’t Guarantee A Payment Will Be Stopped

We’ve told you before about the idiotic loophole in some banks’ stop-payment policies that can allow a supposedly blocked check from being cashed after six months, but here’s a story about a Wells Fargo customer who got written confirmation from Wells Fargo that it had stopped payment on a check that had already been processed.

Our colleague Karin Price Mueller has the story in her latest Bamboozled column for the Newark Star-Ledger.

It all began in early 2013, when the Wells customer made a costly mistake. Ticked off at his lawyer over some billing issues, he angrily dashed off a check for $6,666.66.

Then, on his way home, he apparently realized that his attempt at check-related humor was a bad idea and he didn’t want his lawyer to cash that check.

So he contacted Wells Fargo, went through the process of putting a stop-payment on the check, had an additional $31 debited from his account, and even received a letter in the mail a couple days later confirming the stop-payment.

Thing is, that letter and the $31 fee were all for naught, as Wells had already processed the check. Meaning he was no out $6,697.66.

Numerous back-and-forths with the bank resulted in no explanation for why the check was allowed to be processed.

Last November, he wrote to Wells CEO John Stumpf and eventually — months later — received a response from a bank rep that didn’t sit well with the customer, pointing to fine print on the stop-payment confirmation that warns customers that it’s not a guarantee the check won’t still be cashed.

“Please be advised that when a customer calls to request a stop payment order they are informed that we do not guarantee the stop payment of the check if it has already been accepted by Wells Fargo for processing,” reads the letter affirming the bank’s decision.

An appeal to the federal Office of the Comptroller of the Currency, which regulates Wells Fargo, resulted in another “sorry, but” from the bank.

“While we understand your frustration, our position remains the same,” reads the second letter from Wells Fargo said. “As stated in our previous response, stop payments are not guaranteed if the check has been accepted by Wells Fargo for processing.”

After Bamboozled got involved, it was finally explained that the check was processed before the customer had put in his stop-payment request.

Which just brings up the question: If the check was already being processed, why did Wells allow the customer to go through the whole rigmarole of filing the stop-payment, debiting his account $31 and sending him a confirmation letter whose only worth is as birdcage liner?

“There are nuances in the check-clearing process between banks,” a Wells Fargo rep who somehow manages to look in the mirror every day explains to Bamboozled. “These nuances create timing issues so that in many cases our bankers cannot see what the true status of that particular item is at any given time.”

In the end, the bank made a quasi-human decision, offering to refund the customer the $31 fee it had charged for not stopping payment on his check.

“If they had told me the check was cashed, the conversation would have ended,” says the customer. “With the automated stuff we have today, it should have been a piece of cake. If they can’t handle a simple stop payment request, how can they handle anything else?”

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  1. furiousd says:

    This is one example of how awesome e-currency is – no unnecessary delays on transaction processing, 10 minutes for Bitcoin for instance rather than several days to a week for checks (or months if they take a while to get around to cashing it) – but where that feature is powerful it is also unforgiving, the person on the other end of the transaction must voluntarily return funds as there’s no parental third party to make sure everyone plays nice. Of course I imagine that those using Bitcoin or similar services also wouldn’t authorize a funds transfer to make a childish point, as they would certainly get what they deserve.

  2. Alecto67 says:

    Another fun fact – stop payment orders expire. I worked at a bank for about 12 years and there was built-in time frame (90 days?) for a stop payment order, so if a check was presented after that time, it would be processed normally.