How Stopping Payments can Incur Bank Charges

I’m sure you’ve all had a “check lost in the mail”, but for me, it was true. For the first time ever, I had to utilize the bank’s “stop payment” procedure. I was quite satisfied, except for the fee, that my check was now null and void and the matter resolved. What I didn’t know, was that “stop payments” only last for a mere six-month period, at which time you must “renew” a stop payment. What this means is that when you put a stop payment on a check, 6 months later that stop payment expires and that very same check is then active again? I just found this out the hard way.

In January of this year, I sent my mortgage check in. I check online to make sure that my payments post. It didn’t post. I called my mortgage company and they hadn’t received my payment. I got worried, so after a couple of weeks, I stopped payment on my check and issued a new check. However, I incurred a $35.00 stop payment fee from my bank, had a late fee added to my mortgage (because by now, my payment was very late), and had my credit affected (once again, because of the payment arriving late to the mortgage company). The mortgage company received my new check and all was good now…right? Nope! This is now August. Eight months have passed and on a Friday morning when I go online to make sure that my direct deposit has cleared my bank account, I notice that my balance is very low.

Further investigation….the “stop payment” check that I issued in January, has now cleared the bank. I called the bank and asked them how this could go through and I was told that stop payments are only good for 6 months. I was also told that at the end of the 6 month period, you are entitled to “renew” your stop payment, but if you don’t, your check is once again good. I had always thought that by stopping payment on a check, it was as good as “voiding” that check. This is not so. I have no recourse. I can opt to continue paying $35.00 every 6 months for the rest of my life and keep the stop payment on the check, or learn a very valuable lesson. Stop payments are a farce. The banks lure you in by acting as if they are protecting you and charge you $35.00 for this protection, but don’t inform you that a stopped payment check has now arised again and they are putting it through.

I didn’t do anything wrong except trust the companies I deal with. I trusted the post office to deliver the check to the mortgage company, I trusted the mortgage company to promptly post my payment and I trusted my bank to void a check that was lost. What I got from that was roughly $50.00 in fees, a drop in my credit history and a lot of aggravation! Be careful what you do when it comes to the banks.

I’m sure that within that 8 month time period had I changed banks or something, that when that check showed up, my bank would’ve told the mortgage company that there was a stop payment on the check and that they couldn’t clear it. But, because the money was there, they took it. Or do you think I would’ve been charged for writing a bad check? I guess that decision would be up to the banks. We consumers don’t have a choice or an avenue to travel.