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§6.05 Electronic Fund Transfers—Stop Payment of Preauthorized Transfers

 
Lesson 6:
Checks & EFTs

A consumer may stop payment of a preauthorized electronic fund transfer by notifying the financial institution orally or in writing at any time up to three business days preceding the scheduled date of the transfer. [15 USC §1693e(a).] A financial institution cannot refuse to honor a consumer’s request to stop payment on the basis that the consumer has agreed with a third party to make payment by EFT. In that situation, a financial institution is liable to the consumer for actual damages resulting from its failure to honor the consumer’s instructions and may be liable for a civil penalty and attorney fees. [15 USC §1693m(a).] The consumer’s only obligation is to comply with the financial institution’s procedures for communicating stop payment orders. [See 15 USC §1693h(a)(3); 12 CFR §205.10(c).] 

 

 
 
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