How can I stop a payday lender from electronically taking money out of my bank or credit union account? | Consumer Financial Protection Bureau (2024)

FAQs

How can I stop a payday lender from electronically taking money out of my bank or credit union account? | Consumer Financial Protection Bureau? ›

The Consumer Financial Protection Bureau (CFPB) provides a sample letter you can use. Provide a Copy of the Letter to Your Bank. You should provide your bank with a copy of the letter that revokes your authorization for automatic withdrawals.

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.

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.

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.

You can try to end the payday lender's access to the funds in your account. You may have to close the account and move your money to an account at another bank. Some banks will not open a new account for you if you owe a different bank.

Yes, you can cancel or return an ACH payment. This is partially possible due to the time frame of ACH transfers. ACH transfers can take multiple days to settle, and, as a result, you have more time to stop or reverse your transaction. However, rules can vary depending on your bank or financial institution.

Payday lenders often don't consider whether you can repay the loan—because they are able to just cash your check or access your checking account. This means you may not have enough money left to pay for other expenses, forcing you to take out another loan.

To Whom It May Concern: I currently have my payment for account number automatically withdrawn from my account # . Effective immediately, I would like to cancel these automatic withdrawals and submit this letter as written notification of my termination of your company's authorization to debit my account.

Can I stop automatic ACH payments? ›

There are a couple things to consider before you stop an ACH payment or recurring debit transaction: Payments already in process or completed can't be stopped. To stop a scheduled payment, you'll need to submit the request at least three business days before the scheduled payment date.

If the lender debits your account after you have revoked your authorization, your bank MUST put the money back into your account after you tell them the debit was unauthorized.

Contact your bank's fraud team

Request to speak to the fraud team — they have the ability and resources to take an in-depth look into your account. If there's a transaction causing the block, ask if they can explain the reason.

Yes, you can block a company from charging your credit card. You do this by contacting your bank and either revoking authorization for the payment or requesting a stop payment order.

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 allowing the company to take payments from your account.

If you're struggling with a spending habit, you can freeze specific transactions such as gambling or online and remote purchases. You can freeze your card if you can't find it. You can also freeze transactions abroad, contactless and in-person payments on credit and debit cards.

Stopping a card payment

To withdraw consent, simply tell whoever issued your card (the bank, building society or credit card company) that you don't want the payment to be made. You can tell the card issuer by phone, email or letter.

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.

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.

A lender can sue you for not repaying your payday loan as promised. Payday lenders report missed payments to the credit bureaus, which could cause a drop in your credit score. If a lender wins a lawsuit against you, it could garnish your wages to satisfy the debt.