Stop Payment Orders On Checks Only Last Six Months

Jennifer says National City Bank has contacted her fiance to inform him that the stop payment order he placed on a check is about to expire, and he’ll have to pay another $32 fee to renew it for six more months. She writes, “Have you heard of stop payment now only being ‘suspend payment for six months’? This seems to me to be extortion.” We’re going to come down on the side of the banks in this case—but because of the recurring nature of the fee, it might just be cheaper to close the account.

The problem with a permanent stop payment is that it places the responsibility on the bank to watch out for that specific check forever, or until their bank policies determine the check has expired. No, we don’t think it should cost a consumer over $5 a month to ask the bank to catch the check, but is anyone really surprised that the fee would be set at a level that generates a profit?

Unfortunately—and this is what concerned Jennifer too—experienced scammers may also be aware of the six month window. Attorney Mary Beth Guard tells Bankrate:

“Say you wrote a check for a vacation scam. The scammers know you’ll put a stop-payment on it, but they also know that unless there’s a special agreement with your bank the order will be valid for only six months. They may wait until after six months to cash the check. If your checkbook is stolen it may be best to close the account and open a new one.”

Which brings us to your other option. Jennifer says that she in fact “advised [my] fiance to close the account.” We agree, but not because his current bank is behaving any worse than other banks. Depending on the amount of the check and your bank’s check expiration policies, it may actually be a more cost effective solution.

Before you place a stop payment:

  1. Determine the details of your bank’s check expiration policy (or if it even has one);
  2. Find out the stop payment fee;
  3. Estimate the relative cost (in overall trouble as well as fees) of relocating your checking account to another bank, or in switching your account to a new number at the same bank.

Once you can figure out how many six month renewals it will take to block the check until it expires, you’ll know the true cost of blocking that check, and you can determine whether getting a new account will be the cheaper choice.

You should also know that an oral stop payment order only lasts 14 days—you’ll need to go into the bank and place a written order for the 6 month policy to kick in.

“Stopping a check payment is expensive” [Bankrate.com]
(Photo: Getty)