5.11: Limited Stop-Payment Privileges

When you use an electronic fund transfer, the EFT Act does not give you the right to stop payment. If your purchase is defective or your order is not delivered, it’s as if you paid cash. That is, it’s up to you to resolve the problem with the seller and get your money back.

There is one situation, however, when you can stop payment. If you’ve arranged for regular payments out of your account to third parties, such as insurance companies, you can stop payment if you notify your institution at least three business days before the scheduled transfer. The notice may be oral or written, but the institution may require a written follow-up within 14 days of the oral notice. If you fail to provide the written follow-up, the institution’s responsibility to stop payment ends. Although law provides only limited rights to stop payment, individual financial institutions may offer more rights. If this feature is important to you, you may want to shop around to be sure you’re getting the best “stop-payment” terms available.

Suggestions

If you decide to use EFT, keep these tips in mind:

• Take care of your ATM or debit card. Know where it is at all times; if you lose it, report it as soon as possible.
• Choose a PIN for your ATM or debit card that’s different from your address, telephone number, Social Security number, or birth date. This will make it more difficult for a thief to use your card.
• Keep and compare your receipts for all types of EFT transactions with your periodic statements. That way, you can find errors or unauthorised transfers and report them.
• Make sure you know and trust a merchant before you share any bank account information or pre-authorised debits to your account. Be aware that some merchants use electronic processing of your cheque if you sign a receipt authorising the transaction.

 It is a good idea to build up a relationship with your business bank manager, who will get to know how your business operates from the beginning. Furthermore, a good relationship can help if you later need to raise another loan or extend your credit facilities.

If you raise start-up finance through a bank, they will help you set-up the accounts necessary to handle all your business requirements. However, if you have obtained money from another source you will need to set up dedicated business accounts and will have to provide your bank with the following details:

• The full or registered name of your business
• Your trading address, registered office and postal address
• The number of people owning/controlling your business and holding signing powers
• Their name, mailing address, contact number, position or title

As part of your business operation you will also need to consider how you wish to accept payment and set-up the associated facilities.