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A member recently posed this question about the stop payment process:
If a customer places a stop pay, and an item rejects to our stop pay list, is it appropriate that we return that as R08? Would there be a need to collect a WSUD with a stop payment to return the item as R07 when it rejects to the stop pay list? Both of the return reasons indicate the receiver doesn't accept the item. Are we putting too much work on our customers and front line by collecting a WSUD with the stop pay? What is standard practice?
After our conversation, this was my response:
- A stop payment request is a proactive measure that is taken by the customer. If a customer requests a stop payment verbally or in writing, the RDFI must comply as long as the timing requirements per the Nacha Rules are met. If the stop payment order is properly keyed into the system and the item hits your unpost, it should be returned as R08. No further action is required from the customer.
- You mentioned there is a section on your stop payment form that indicates that the customer requested that the payment be stopped with the Originator. This section seems to be causing some confusion on the back end and I suggested that it be removed. According to our conversation, when this section of the form is completed, back office has been requesting a Written Statement of Unauthorized Debit (WSUD) be obtained and are returning the items as R07. This should not be the case. If you received a stop payment request and the item hit your unpost, the item should be returned as R08. This section of the form is not necessary for you to process the stop payment. The reason why the customer is requesting the stop payment doesn’t really matter.
- A WSUD is a reactive measure that is used when an item has posted to the account and a stop payment was not placed. There are a number of claims that the customer can make: Authorization Revoked, Unauthorized, Not in Accordance with the Terms, etc. If the item has posted to the account and your customer is requesting the item be returned, then they should be signing a WSUD and the item should be returned with the appropriate reason code depending on the appropriate reason.
- As long as you have a stop payment form on file and it is still active on your system, if the item hit the unpost report, it should be returned R08.
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