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.
How to stop automatic electronic debits
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 sample letter .
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 sample letter . Some banks and credit unions may offer you an online form.
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 sample letter 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.
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 sample letter .
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 state attorney general . You can also submit a complaint to the CFPB online or by calling (855) 411-2372.
FAQs
You should provide your bank with a copy of the letter that revokes your authorization for automatic withdrawals. The CFPB also provides a sample letter for notifying your bank that you've told the lender to stop withdrawing money from your account.
How do I block payday loans from debiting my account? ›
How to stop automatic electronic debits
- 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. ...
- Call and write your bank or credit union. ...
- Stop payment. ...
- Monitor your accounts.
Call and write your bank or credit union
Next, call your bank or credit union and say you have revoked authorization for the company to take automatic payments from your account. Customer service should be able to help you, and your bank or credit union might have a form for this online.
How to stop payday loan garnishment? ›
If your wages or bank account have been garnished, you may be able to stop it by paying the debt in full, filing an objection with the court or filing for bankruptcy.
Can I close my bank account to stop payday loans? ›
Can I close my checking account to try to stop a payday lender from taking money from it? Yes, but the payday lender will probably take collection action quickly.
Can I block a company from taking money from my bank account? ›
You can give your bank a stop payment order even if you haven't revoked your authorization with the company you're paying. A stop payment order tells your bank to stop taking payments from your account.
Can you block ACH withdrawals? ›
You can do this over the phone, or you can write the company stating clearly that you are revoking authorization. Then, you'll need to contact the bank or credit union that's associated with the payment and let them know that you've revoked authorization from the company.
How do I tell my bank to stop payday loans automatically withdrawing? ›
Notify Your Bank to Stop Payment on the Withdrawal
Your bank must stop payment on an automatic withdrawal if you give it at least three business days' notice in person, over the phone, or in writing.
Can I tell my bank to block a transaction? ›
You can contact your bank and place a stop payment order on the recurring transaction. Generally, a stop payment order is only good for six months. To stop payment, you will need to notify your bank at least three business days before the next payment is scheduled to be made. Notice may be made orally or in writing.
Can you stop an electronic funds transfer? ›
Normally, you cannot stop an EFT payment after you initiate it. The EFTA does not give you the right to do so. If you need to stop a payment or have your money refunded, that is between you and the person you paid. However, you might be able to stop scheduled, recurring EFT payments (e.g., scheduled utility EFTs).
It's hard, but the steps you'll need to take to get out of payday loan debt include:
- Request a repayment plan from your lender.
- Use lower-interest debt to pay off a payday loan.
- Commit to not borrowing more.
- Pay extra on your payday loan.
- Consider debt settlement or bankruptcy.
How to stop payday loan collection legally
- Step 1: Check the statute of limitations for your state. Every state in the U.S. has a set amount of time that collections can be pursued on debts. ...
- Step 2: Ask for a debt validation letter. ...
- Step 3: Cross-reference your credit report. ...
- Step 3: Send a cease and desist.
Filing for Bankruptcy: The Most Immediate Relief
Once a garnishment has been filed and you're looking for immediate, concrete solutions, filing for bankruptcy stands out as the most effective way to stop wage garnishment immediately.
Can I stop a loan company from debiting your account? ›
You will need to notify your bank at least three business days before the scheduled date of the transfer and inform it that you wish to stop payment. You can provide the notice orally, but the bank may require you to confirm the request in writing.
How do I stop an online payment transaction? ›
To stop payment, you need to notify your bank at least three business days before the transaction is scheduled to be made and your bank may charge a fee. The notice to stop the transaction may be made orally or in writing. A bank can require written confirmation of an oral stop payment request.
How do I protect myself from payday loans? ›
These steps will help protect you when getting a payday loan.
- Shop around before you sign anything.
- Make sure the lender gives you a copy of the agreement.
- Make sure the lender gives you a cancellation form.
You can contact your bank and place a stop payment order on the recurring transaction. Generally, a stop payment order is only good for six months. To stop payment, you will need to notify your bank at least three business days before the next payment is scheduled to be made. Notice may be made orally or in writing.
Can I block payments into my bank account? ›
Contact your bank: Reach out to your banks customer service or visit a branch to discuss the situation. They can guide you on what steps you need to take to stop the person from sending money to your account.
Is there a way to block payments? ›
Another option is to ask your bank for a stop payment order. This request directs your bank to stop making future payments to a company. You can give the order in person or over the phone, but whichever you choose, it's always best to get it in writing and do so promptly before the next payment is scheduled.
