Stop Payment Laws on Money Orders
Money orders are negotiable instruments that you can use to make payments. You can buy money orders from banks, credit unions, the post office and money transfer services. Most state banking rules are based on the Uniform Commercial Code but the UCC includes very little detail about money orders. Consequently, most financial firms handle stop payments for money orders in the same way that stop payments for personal checks are handled. Once you place a stop payment, it can take between 24 and 48 hours before it takes effect and the issuer has no liability if someone negotiates it before the hold takes effect.
Other People Are Reading
Instructions
-
-
1
Go to the location where you bought the money order or call the money order issuer by phone if you cannot physically get to the location. Explain that you need to place a stop payment on your money order. Provide the representative with the money order reference number which you can find either on your purchase receipt or on the purchaser's copy of the money order that you detached from the order before you gave it or mailed it to the payee.
-
2
Tell the representative the date that you bought the money order, your name and the name of the payee. Explain the reason for placing the stop hold such as the money order was stolen or lost. Tell the representative if you wrote anything on the memo line that could help someone negotiating the money order to easily recognize it.
-
-
3
Provide the issuer with your bank account number, debit card number or make a cash payment in order to cover the cost of placing the stop hold. As of 2011, the United States Postal service charges a $5.40 for canceling a money order but banks often charge a fee in excess of $30. Ensure you have enough money in your account to cover the fee otherwise you may incur an overdraft fee.
-
4
Complete the necessary paperwork that the money order issuer asks you to fill out in order to place the hold. In many states, a verbally requested hold only remains in place for two weeks but a written hold request remains in place for six months. Most money order issuers have specific forms that you must complete in order to place a hold. Typically, these forms contain your personal information and details of the money order.
-
5
Collect your refund from the money order issuer after the stop takes effect. Many money order issuers simply issue a replacement blank money order that you can make payable to yourself. Other institutions may offer you a cash refund or make a deposit into your bank account.
-
1
Tips & Warnings
Contact the money order payee before you place a stop payment. In many states, you could run afoul of fraud laws if you issue a money order and then place a stop hold on it without first notifying the recipient. In such situations, you may have to reimburse the payee and cover any bank penalty fees that they incurred when trying to negotiate the item.
Banks sell personal money orders that you must fill out yourself, but they also issue bank money orders that are drawn against the bank itself. On bank money orders a bank representative writes or types the name of the purchaser and the payee. You cannot place a stop payment on a bank money order; you can also file a report to get a refund if no one negotiates the money order with 90 days of its issuance.
