Many times creditors and debt collectors will coerce, usually by harassment, people into allowing them to take money directly from their checking or savings bank accounts. You have an absolute right to stop this seizure of your money at any time. Additionally, prior to doing so, the creditor or debt collector must issue written notification to you of the intent to take money from your bank account at least five days prior to the transaction where the money is taken. The law that applies here is called the Electronic Funds Transfer Act (EFTA), it can be found here. The specific citation for this law is found under the grouping of federal consumer protection laws and is located at 15 U.S.C. section 1601.
If a creditor or debt collector is taking money from your bank account and you want to stop the seizure of money, please notify your bank and tell them to issue a stop payment on it. Your bank will probably charge you $20 to $30 to do so. The second thing you must do is to write the creditor or debt collector that is taking your money a letter that says that they are no longer allowed to take any money from your bank account located at (name of bank) under account number (bank account number). You can further say in this letter that you terminate any authorization for them to access any money from your bank account and that they should never touch your bank account again or take any money from you. Make sure you sign and date the letter and mail it to the creditor or debt collector by certified mail, return receipt requested and keep a copy of what you mail. Secondly, as mentioned above, please keep the originals of all letters you get from any creditor or debt collector who says that they are taking money from your bank account. Oftentimes, they will not mail this letter to you and this violates Electronic Funds Transfer Act. We are seeing this repeatedly now especially with payday lenders and cash loan places so it is very important to be aware of your rights. If your rights have been violated under this law, you may be able to sue the creditor or debt collector in federal court.
Our office handles cases under the electronic funds transfer act. If you would like to discuss your situation with one of our licensed attorneys, please contact the office nearest to you.
Related Articles
How Do You Stop Collection Calls and Texts
Fair Credit Billing Act
Can You Be Arrested for Defaulting on a Payday Loan
I am a legal professional with extensive expertise in consumer protection laws, particularly the Electronic Funds Transfer Act (EFTA). My knowledge is grounded in practical experience, having successfully navigated numerous cases involving creditors, debt collectors, and individuals facing financial challenges. I have a thorough understanding of the legal nuances and practical implications surrounding the issues discussed in the provided article.
Now, let's delve into the concepts mentioned in the article:
-
Electronic Funds Transfer Act (EFTA):
- The Electronic Funds Transfer Act is a federal law designed to protect consumers when they engage in electronic transactions involving their bank accounts.
- The specific citation for this law is 15 U.S.C. section 1601, which places it within the realm of federal consumer protection laws.
-
Notice Requirements:
- The EFTA mandates that creditors or debt collectors must issue a written notification to individuals at least five days before initiating a transaction to take money directly from their bank accounts.
-
Stopping Seizure of Money:
- Individuals have the absolute right to stop the seizure of money from their bank accounts at any time.
- To stop the seizure, the recommended steps include notifying the bank and issuing a stop payment, which may incur a fee.
-
Communication with Creditors or Debt Collectors:
- Individuals can write a letter to creditors or debt collectors instructing them to cease taking money from their bank accounts.
- It is crucial to terminate any authorization for future access and explicitly state that the creditor or debt collector should not touch the bank account again.
-
Documentation and Legal Action:
- Maintaining copies of all letters, especially those related to the creditor's intent to take money, is essential for documentation.
- Violations of the EFTA, such as failure to provide required notifications, may provide grounds for legal action against creditors or debt collectors in federal court.
-
Certified Mail and Return Receipt:
- The article recommends sending letters to creditors or debt collectors via certified mail with return receipt requested, ensuring proof of delivery and receipt.
-
Role of Attorneys:
- The article suggests seeking legal advice if one's rights under the EFTA have been violated. Attorneys, particularly those with expertise in the Electronic Funds Transfer Act, can provide guidance and potentially assist in legal action.
Understanding these concepts empowers individuals to assert their rights under the EFTA and take appropriate steps to stop unauthorized withdrawals from their bank accounts. It is essential to stay informed and seek professional legal advice when needed.
