When it comes to bank transfers, one question that often comes up is whether a transfer can be stopped once it has been initiated. The short answer is maybe, but it depends on the type of transfer, the banks involved, and how far along the transfer process is.
Stopping a standard wire transfer
For standard domestic wire transfers between banks in the United States, it may be possible to stop or recall the transfer, but only if the funds have not yet been made available to the recipient. The faster a transfer is identified as needing to be stopped, the better the chances are that the banks can halt the transaction before completion.
To have the best chance of stopping a wire transfer, the originating bank (the bank that sent the wire) should be contacted as soon as possible after the transfer has been initiated. Many banks have a short window of time after a transfer is released to submit a request to stop payment – this may range from 30 minutes up to a few hours.
If the funds have already been credited to the recipient’s account, recalling a wire transfer becomes much more difficult. The originating bank would need to request that the recipient’s bank pull back the funds. If the recipient withdraws, transfers or spends the funds, they may not be recoverable.
Steps to stopping a wire transfer
To stop a wire transfer, the account holder should immediately contact the originating bank and provide:
- Name and account number
- Details of the wire transfer including recipient details and amount
- Reason for the request to stop payment
The bank may request written confirmation of the stop payment request. An investigation will also need to be conducted by the banks involved to determine the status of the funds and whether they can be recalled. A fee may be charged by the bank for requesting a stop payment.
Challenges with stopping wires
There are a few key challenges banks face when trying to stop wire transfers:
- Wires move quickly – Once released, wire transfers are processed rapidly between banks, often within minutes.
- Recipient bank cooperation needed – The recipient’s bank has to agree to pull back the funds and return them.
- Funds may already be withdrawn – The recipient may have already withdrawn or spent the wired funds by the time the stop request is made.
Due to these challenges, there is no guarantee that a wire transfer can be successfully recalled. But the sooner the originating bank is notified, the better the chances.
Stopping an ACH transfer
For ACH transfers, which facilitate bank account and direct deposit transactions, the ability to stop a payment depends on the type of ACH transfer and the current status.
Stopping same-day ACH transfers
Same-day ACH allows funds to be moved between accounts more rapidly, with settlement occurring multiple times per day. To stop a same-day ACH transfer, the originating bank should be contacted before the applicable cutoff time, which is currently 2:45PM ET.
If the payment has already settled, recalling the funds becomes more difficult but may still be possible if initiated quickly.
Stopping standard ACH payments
For standard ACH transactions, stopping an ACH payment is typically possible if requested before the settlement date. Settlement occurs in batches once per day for next-day settlement of transfers. The account holder generally has until the end of the banking day before the scheduled settlement date to request a stop payment.
Recalling settled ACH transactions
If an ACH payment has already settled, recalling the funds is difficult but still may be possible in some cases. An ACH return or reversal can be requested to pull back the funds. This must be initiated generally within 5 banking days of settlement.
As with wire transfers, the sooner the originating bank is notified of the need to stop or recall the transfer, the better. Having the account number, amount, and details on the intended recipient available helps facilitate the process. There is still no guarantee that the funds can be recovered however.
Stopping online or mobile banking transfers
For transfers initiated through online or mobile banking platforms, such as account-to-account transfers, the ability to cancel the payment often depends on its status.
Most banking platforms allow transfers to be cancelled up until the payment is processed and released. This gives a short window of time after the transfer is initialized to cancel it.
Once the transfer leaves the originating bank, recalling it becomes very difficult. The receiving institution would have to agree to pull back the funds and reverse the transaction, which is typically unlikely once the payment has settled.
To have the best chance of stopping a mobile or online transfer, the payment should be flagged for cancellation as soon as possible. Contacting the bank may increase the chances of successfully recalling the funds after the transaction was released, but there is still no guarantee.
Stopping checks or drafts
For payments made by check or drafts, most banks allow a stop payment request in case a check is lost or needs to be cancelled before being cashed or deposited. However, there is usually only a short window where a stop payment can be successfully requested.
The account holder generally has until the check is presented and paid to request a stop payment. A standard stop payment order on a check is typically valid for around 6 months, after which it would need to be renewed.
To request a stop payment on a check, the following information is usually required:
- Account number
- Check number
- Exact amount of the check
- Name of party check was made out to
- Reason for stop payment
There may be fees associated with stop payment orders on checks. And while the bank will attempt to stop payment on the check, there are no guarantees that the transaction can be intercepted before the check clears, especially if it has already been received and processed by the payee’s bank.
When a transfer cannot be stopped
In some cases, it may not be possible to stop or reverse a transfer, even when acted upon quickly. This can happen if:
- Funds have already been withdrawn from the recipient’s account – the bank has no ability to force the recipient to repay the funds.
- The recipient’s bank is unable or unwilling to return the funds – they may not comply with a funds return request.
- Too much time has elapsed – banks have limited time frames for disputing settled transactions.
- The transfer method does not allow cancellation – some transfer types cannot be reversed.
Banks also typically reserve the right to refuse a stop payment request if they believe it would conflict with banking regulations or they have reasonable cause.
Preventing incorrect transfers
While it’s sometimes possible to stop a transfer, the best policy is to take steps to prevent incorrect or fraudulent transfers from occurring in the first place. Some tips for transfer safety:
- Double check recipient details before sending any transfer
- Set up transfer alerts and monitoring to identify any unauthorized transactions
- Consider if a transfer method like a wire or ACH is appropriate for the situation
- Keep account and personal information safe from potential fraud or identity theft
Taking preventative measures can reduce the need to attempt halting transfers that were unintended or sent in error.
Conclusion
Stopping or canceling bank account transfers is sometimes possible but not guaranteed. The ability to halt a transfer often depends on the type of transfer, the status of the payment, and how quickly action is taken. In some cases, banks simply are unable to intercept or recall funds once a transfer has been processed.
Contacting the bank as soon as an error is identified is crucial. Providing the necessary information and documentation can assist the bank in attempting to stop the transaction before completion. But there is still no assurance that a transfer can be reversed once initiated.
The best practice is to take precautions to avoid sending incorrect or fraudulent transfers in the first place. Setting up transfer authentication and notifications, double checking recipient details, and reviewing activity can help account holders avoid the need to place stop payments and deal with the uncertainty of trying to recover funds already released.