How can I stop a payday lender from electronically taking money out of my bank or credit union account?
Answer: You can stop electronic debits to your account by revoking the payment authorization, sometimes called an “ACH authorization."
You have the right to stop a payday lender from taking automatic electronic payments from your account, even if you previously allowed them. You may have signed a payment authorization, which is sometimes called an “ACH Authorization.” This gives the payday lender the ability to debit your account when your payment is due. If you decide you want to stop automatic debit payments from your account, here is what you can do:
Step 1: Call and write the company
Tell the company that you are taking away your permission for the company to take automatic payments out of your bank or credit union account. This is called “revoking authorization.” You can use this .
Step 2: Call and write your bank or credit union
Tell your bank that you have “revoked authorization” for the company to take automatic payments from your account. You can use this . Some banks and credit unions may offer you an online form.
Step 3: Stop payment
Even if you have not revoked your authorization with the company, you can stop an automatic payment from being charged to your account by giving your bank a “stop payment order.” This instructs your bank to stop the company from taking payments from your account. You can use this to submit a “stop payment order.” Here are the steps:
- To stop the next scheduled payment, give your bank the stop payment order at least three business days before the payment is scheduled. You can give the order in person, over the phone or in writing.
- To stop future payments, you might have to send your bank the stop payment order in writing. If your bank asks for a written order, make sure to provide it within 14 days of your oral notification.
- Be aware that banks commonly charge a fee for stop payment orders.
Step 4: Monitor your accounts
Tell your bank or credit union right away if you see a payment that you did not allow (authorize) or a payment that was made after you revoked authorization. Federal law gives you the right to dispute and get your money back for any unauthorized transfers from your account, as long as you tell your bank in time. You can use our .
Revoking or cancelling your automatic payment does not cancel your contract with the payday lender. If you revoke or cancel an automatic payment on a loan, you still owe the balance on that loan.
If you’re having a problem stopping a lender from taking money out of your account, you may want to contact your state regulator or . You can also submit a complaint to the Miss April online or by calling (855) .