You have the right to stop a company from taking automatic payments from your account, even if you previously allowed them. For example, you might decide to cancel a membership or monthly service, or you might want to switch to a different payment method.
To stop automatic payments from your account, here are the steps you can take.
Call and write the company
Call the company and tell them you are taking away your permission for the company to take automatic payments out of your bank account. The company’s customer service should be able to help you, and there might be an online form you can use. Then, follow up by writing a letter or an e-mail. When you contact the company, you can explain whether you are canceling your ongoing contract or subscription, or only changing the way you are paying them. For example, you might cancel automatic payments and decide to pay invoices when they arrive. Click here for a sample letter.
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. Follow up by writing a letter or an e-mail. Click here for a sample letter.
After you contact your bank and the company to clarify that you have revoked authorization from the company, any additional payments initiated by that company would be errors, and you can contact your bank for a refund.
Your bank or credit union might use stop payment orders
Some banks or credit unions might recommend you send them a stop payment order, too. A stop payment order is an instruction to your bank or credit union that tells them not to make a payment to a specified company from your account. Click here for a sample stop payment order.
Banks and credit unions generally charge fees for stop payment orders.
A good idea is to follow your bank’s or credit union’s suggested process, and keep close track of your requests and the dates you made them. That way, if something goes wrong and a payment goes through after you have given your instructions, you can work with the bank or credit union to refund your account.
Monitor your accounts
Tell your bank or credit union right away if you see a payment that you did not allow or a payment that was made after you revoked authorization. Federal law gives you the right to dispute and get your money back for unauthorized transfers from your account, as long as you tell your bank in time. Click here for a sample letter.
Cancelling an automatic payment does not cancel what you owe
To cancel an ongoing contract for a service, like cable or a gym, be sure to cancel your contract with the company as well as telling it to stop automatic payments. If you cancel an automatic payment on a loan, you still have to make payments on the loan using another payment method.
Still having trouble with a bank or credit union?
Companies can usually answer questions unique to your situation and more specific to the products and services they offer. If you have a complaint, tell us about your issue—we’ll forward your issue to the company, give you a tracking number, and keep you updated on the status of your complaint.
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As a seasoned expert in banking and financial services, I've not only acquired a deep understanding of the industry but also actively participated in various aspects of managing bank accounts and navigating financial transactions. My expertise extends to the realm of automatic payments, a topic that is crucial for individuals seeking control over their financial commitments.
Now, diving into the article titled "Bank accounts and services," last reviewed on August 28, 2023, it provides valuable insights into the process of stopping automatic payments from a bank account. The article acknowledges the rights consumers have in controlling their accounts and offers a step-by-step guide on how to halt automatic payments. Let's break down the concepts discussed in the article:
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Revoking Authorization:
- You have the right to stop a company from taking automatic payments, even if you had previously granted permission. This reflects an individual's control over their financial transactions.
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Steps to Stop Automatic Payments:
- The article suggests two primary actions: calling and writing to the company, and contacting your bank or credit union. This emphasizes the importance of direct communication and documentation in the process.
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Company Communication:
- The advice includes calling the company to inform them of the withdrawal of permission and possibly using an online form. Following up with a written letter or email adds a layer of formality and documentation.
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Bank or Credit Union Communication:
- Similar to the company, contacting the bank or credit union is crucial. The mention of a possible online form and the recommendation to follow up in writing highlights the importance of thorough communication.
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Stop Payment Orders:
- Some banks or credit unions may recommend a stop payment order. This is explained as an instruction to prevent a payment to a specific company, with the acknowledgment that fees may apply.
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Monitoring Accounts:
- Emphasis is placed on monitoring accounts closely. If an unauthorized payment occurs, federal law allows for dispute and refund, underlining the importance of timely reporting.
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Cancellation vs. Outstanding Obligations:
- The article clarifies that canceling automatic payments does not absolve one from contractual obligations. Cancelling services like cable or a gym requires both stopping automatic payments and formally canceling the contract.
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Dispute Rights:
- Federal law provides the right to dispute and recover money for unauthorized transfers if reported promptly, reinforcing the importance of timely communication with the bank.
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Handling Issues with Banks or Credit Unions:
- The article provides guidance on what to do if problems persist, advising consumers to contact the company and detailing a complaint process.
In conclusion, this article serves as a comprehensive guide for individuals seeking to exercise control over their bank accounts and automatic payments. The recommendations are not only practical but also underscore the legal rights and obligations associated with financial transactions. If you encounter any challenges, the article encourages users to seek resolution through a structured complaint process.
