How Can I Block Payday Loans From Debiting my Account?
You can stop automatic payments on a payday loan by revoking the Automated Clearing House (ACH) authorization that gives a payday lender permission to electronically take money out of your bank account or credit union.
How to Stop Automatic Payments on a Payday Loan
- Send a Certified Letter to the Payday Loan Company
By sending a certified letter to the company to block payday loans from debiting your account, you will have traceable evidence of your communication. This writing can then be referred back to if needed at a later date if there are any issues with revoking authorization for the company to debit your account any further. It is also a good idea to follow up on your letter with a phone call directly to the company to ensure they have received your communication.
2. Send a Certified Letter to your Bank or Credit Union
After you send written communication to your payday lender to block them from debiting your account, you will also want to write your bank or credit union to inform them that you have revoked authorization. Let them know that your payday lender no longer has permission to take automatic payments from your bank account, and you have revoked the authorization that let them debit your account via electronic funds transfer. This is the best way to cover all your bases, especially if you have any reason to believe that your payday lender will not accept the revoked ACH authorization.
3. Submit a Stop Payment Order
Similar to revoking payment authorization, a stop payment order is a formal request made to your bank or credit union to cancel an electronic payment that has not been processed yet. This request should be made at least three business days ahead of the next scheduled payment, and can be specific to one or more future payments. Like with the first two methods above, it will be most effective to provide your bank with a written notice, and follow up with a phone call to verify proper execution of the request.
4. Monitor for Unauthorized Transactions
After you’ve followed the steps above, keep a close eye on your bank account for an unauthorized transaction. If you see an unauthorized payday loan amount debited from your account it’s important to act quickly. If you have already revoked payment authorization you will want to contact your bank or credit union as soon as possible. You have the legal right to dispute any unauthorized electronic transfers out of your account, so long as you immediately report the charge.
Once you’ve gotten in touch with your bank, you’ll want to contact the payday lender next to stop them from continuing to debit your account moving forwards. If you’re having any trouble with how to revoke ACH payment authorization, don’t hesitate to get in touch.