Americans love heist movies and the media loves to write about them. Conduct an online search, and one will find over 25 pages of links to all-time lists from a diverse group of orgs including imdb.com, Hollywood Reporter or The Wall Street Journal where the irony of a conservative financial publication covering films about corporate espionage does not get lost on even the most casual observer.
On February 4, 2016, a cyber-heist of galactic proportions struck the international banking system, and there is every reason to believe a Hollywood interpretation will appear on the big screen as soon as the legal dust settles.
If you missed it, computer hackers used malware to illegally transfer $81M of Bangladesh Bank holdings from the Federal Reserve Bank of New York to fake accounts in the Philippines. The plot thickens with accusations of lapses in protocol, conspiracy and money laundering while the crime trail leads through the United States, Bangladesh, Philippines and China. The thieves themselves did not escape scrutiny since their spelling error blocked the transfer of an additional $850 million.
On February 8, the Bangladesh Bank contacted the Rizal Commercial Banking Corporation in the Philippines, requesting stop payments on the transfers in conjunction with a freeze of the perpetrators’ accounts. Unfortunately, five illegal transfers occurred before the stop payments could be executed and even the receipt of the related messages has been contested.
Millions of transactions representing billions of dollars are conducted each day on all levels of commerce, making transfers and other bank services resonate with individuals and businesses worldwide. Stop payments, in particular, are requested as a last resort for those attempting to recover funds, making the story hit ever so close to home for any payee or payer.
Stopping Check Payments
The rules for stopping a check payment (i.e. stop payment) are very clear according to the Federal Deposit Insurance Corporation (FDIC).
“Your bank must receive and process your request before the funds are removed from your account, and that window of opportunity has gotten shorter in recent years. Once a check has been paid, it's up to you to try and get your money back from the person or merchant who cashed the check. Also remember that your bank may charge a fee, typically ranging from $20 to $35, to stop a check.
“If you orally request a stop payment, follow up in writing. Under the law in most states, an oral request to stop payment on a check expires after 14 days, but a written request is good for up to six months.”
“Timing is everything” as the saying goes, and the similarities between the synchronization that failed the Bangladesh Bank (self-inflicted or third party) and what can happen to individuals or businesses delaying or disrupting the stop payment process are striking.
Reasons for Stop Payments
Individuals and businesses initiate the process for a variety of reasons.
“You might issue a stop payment order if you change your mind after you've already started making payment,” states Quicken. “For example, you may fall into a dispute with a company that sells you a product or service and want to halt payment until you resolve the matter.
Another reason to stop payment is if you misplace your checkbook and fear it has been stolen, or if you know that an unauthorized person has forged your signature on one of your checks. You might stop payment if you realize after issuing the [check] that the account has insufficient funds and want to avoid the bounced-payment fee, which is usually larger than the stop-payment fee.”
Sometimes there are crossroads to be faced when individuals or businesses initiate stops, only to discover that the actions were unnecessary. The correct items were ordered; checkbooks are located; the concern over insufficient funds was unfounded. Whatever the reason and whatever the perspective, the second guessing is what keeps consumers and merchants awake at night as they fret over potential lost funds.
If your business regularly looses revenue as a result of customers initiating stop payments, then CrossCheck’s Stop Payment service may be the right choice as you try to minimize loss and increase sales. It offers protection from Stop Payment check returns and 24/7/365 approval of checks from out-of-town, out-of-state, Canada and even US territories. Download our free insiders guide to learn how it can work for your business.