Can a tenant reverse a payment with COZY?

7 Replies

Hey Guys,

I am in the process of picking up my second rental property and am looking to streamline the rent collection process. Currently I collect a check from my sole rental but would like to offer electronic payments as well.

The main issue I have is trying to find a system or practice that does not allow a customer (tenant) to reverse a fund after payment is made. I have had personal experiences with paypal where they took the buyers word without any evidence and screwed me out of a nice chunk of change. 

I lie the idea of cashing a check because once its cashed, it's done. Do ACH or credit card payments offer this type of security? Whats to stop a tenant from paying the last month's rent on a lease, move out then put a claim in when they get their statement?

I am a Chase customer and have looked into quickpay but heard rumors it's just like paypal as in its reversible.

Thanks for the help

Steve

I could be wrong, but I also believe all payment methods listed in your original post are reversible. The only exception is wire transfer, which is typically the only method accepted by title companies when bringing cash to closing due to the fact that it is not reversible.

I will stick to paper checks then. There is no way in my knowledge to reverse a check payment after it has cleared. Allowing a tenant to reverse a credit card transaction a month after they leave is just asking for trouble. 

I have to say its a bit of a challenge in my experience to get a payment reversed aside from fraud. I had payment sent ACH to someone for sixth months and could not get the bank to reverse them even though neither bank could find where the payment went once it left my account. Have any of you had a tenant reverse an ACH payment?
Originally posted by @Steve G. :

I will stick to paper checks then. There is no way in my knowledge to reverse a check payment after it has cleared. Allowing a tenant to reverse a credit card transaction a month after they leave is just asking for trouble. 

 Can't you put a stop payment on it? Even though the bank will credit you the amount, there's typically a hold on checks. 

Stand corrected you cant... "start" a stop payment once a check is cashed.

Ck with your bank if you do not trust your tenant you do not need to engage in a business relationship. That works both ways.

Originally posted by @Steve G. :

I will stick to paper checks then. There is no way in my knowledge to reverse a check payment after it has cleared. Allowing a tenant to reverse a credit card transaction a month after they leave is just asking for trouble. 

You can reverse a check just as easy as you can reverse an ACH deposit, maybe easier. The problem is to reverse either of these, the tenant needs to declare the charges as not authorized. They would be lying, so there is risk for them that they are committing fraud.

If you want to hear something scary, checks can be reversed months after they were written. There was a case I heard of where a tenant was paying rent using a check book from a charity they worked at. It took the charity more than a year to catch the fraud and when they reported it to the bank, all the payments from the last year were reversed out of the landlords account. 

Cashiers checks are more secure, but I think even they can be cancelled under certain circumstances.

Cash is king if you are concerned about someone trying to cancel the payment. If I have a tenant that bounces a check, I only take cash to replace it.

I have used Cozy for well over a year and find it to be secure and reliable. The tenant ACH authorization process is pretty good. If someone is reversing payment, they better have pretty good proof as to why they are doing it.

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