A check is a common form of payment used when purchasing goods or paying for a service received. The entity that receives the check would usually cash the check at the bank where they would receive the funds, either immediately or after a certain period of time, depending on the bank’s policy. However, if a check falls into the wrong hands, the payer needs to be proactive in canceling the check to ensure the funds are not withdrawn.
How to Cancel a Check
A payer who finds out their signed check is lost or stolen can take a number of steps to ensure the check does not get cashed. First, the bank should be directed to put a stop payment on the check. The stop payment basically instructs the financial institution not to honor the check if it has not already been processed. To stop payment on a check, the bank would need information such as the check number, amount of the check, and the name of the individual or corporation the check was made out to. Official paperwork for the request will need to be submitted to the bank either through mail or in person at a branch within 14 days of verbally or electronically requesting a check to be canceled. If the bank does not receive written confirmation by the time the 14-day period elapses, the stop payment request will not be honored.
When the bank has received all the necessary information to confirm the canceled check, it will be flagged for six months, after which the stop payment expires. Most banks won’t cash a check that is six months old, however, if the payer is still concerned about the possibility of the check being cashed, they can extend the stop payment for another six months.
Fees for Stop Payments
Banks usually charge a fee of up to $30.00 for canceling a check. The cost can vary, depending on how the cancel request is made or the type of client the payer is. For example, some banks charge little to no fees if the request is made online, but a higher fee may be charged if the request is made in person or through a customer service agent on the phone. Some banks will also charge the check writers less if they hold certain types of accounts with the bank.
The fees charged may add up if more than one check is canceled. Some banks may charge the same fee for each check, while others may have a flat fee for multiple checks. The fee will also be charged on renewals after the six-month stop payment order has expired. If the check amount is less than the stop payment cost, then canceling the check might not be worth it.
An account holder who loses blank checks or has them stolen might consider closing the account from which the unauthorized checks might be written. Putting a stop payment on each blank check number could mean paying a fee for each one, which would get expensive. Closing the account and opening a new one would most likely be more cost-effective.
Other financial vehicles of payment that can be canceled include money orders and electronic payments. You cannot cancel a cashier’s check since the funds are guaranteed to be paid by the bank. Debit card transactions also cannot be canceled, but a chargeback can be requested from the financial institution that issued the card.
While canceling a check can prevent the unauthorized withdrawal of funds from one’s account, a person who has had checks stolen must still endeavor to monitor their credit reports over the following months to avoid becoming a victim of identity theft. Many of the best credit monitoring services could be useful in this endeavor, as they also offer identity protection tools and services.