Canceling automatic withdrawals from your bank account can be a frustrating, time-consuming and expensive hassle. If you want to stop automatic withdrawals from bank accounts and automatic debits for bills, you need to follow specific steps to ensure that you do not end up incurring charges after canceling an account, service, or subscription.
Types of Automatic Withdrawals and Preauthorized Debits
Automatic payments, withdrawals, and debits are automatic transactions designed to save the consumer and companies from having to spend time and resources processing payments manually, such as by mail. Automatic debits are almost instantaneous, but in contrast, an automatic withdrawal payment can take several days to be fully processed by a bank. Reversing an autopayment can take days or even weeks. Aside from those differences, autopayments and automatic debits are almost indistinguishable for most consumers.
A preauthorized debit is an agreement between a consumer and a business in which the business withdraws funds directly from the consumer’s bank account at certain specific intervals, usually once a month. Automatic debits are typically used to pay monthly bills like loan payments, phone bills, credit card bills and utility payments. Although automatic debits are usually for the same amount every month, they can be set up to cover any amount in a specified range for a specified company, such as a utility provider. Preauthorized debits and automatic withdrawals also can be used for one-time payments like a tax bill or online purchase.
Most financial institutions and companies refer to preauthorized payments as Automated Clearing House items. ACH is a system of electronic payments. When a consumer authorizes an ACH payment, the authorization allows a merchant to withdraw funds from the customer’s bank account.
How to Cancel an Automatic Payment
It’s generally easy to set up automatic payments, but it’s not always easy to cancel them. Several major financial institutions don’t offer easily accessible instructions for canceling automatic withdrawals on their websites. A search of Citi’s website for “how to cancel automatic payments,” for example, yields no clear results for instructions but provides some details in the fine print of its Online Bill Payment Promise page: “If you want to cancel an online bill payment, you must do so by 11:59 p.m. ET prior to the date the payment is scheduled to be made.”
Bank of America lists “How can I cancel my eBill?” on its frequently asked questions page, but the answer directs customers to, “Sign in to Online Banking and follow the instructions to cancel eBill service.” Similarly, Chase lists “How do I cancel or change a single payment?” on its FAQ page, but Chase indicates that canceling or editing a scheduled payment is as easy as clicking a button on its Payment Activity page.
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Wells Fargo provides more details, directing customers to take the following steps to change or cancel an automatic payment or withdrawal in order to stop a merchant’s ability to debit an account:
- Contact the merchant in writing.
- Revoke your authorization to charge your account.
- Keep copies of your written notice revoking authorization.
- If possible, obtain and record a cancellation number from the merchant.
You can use these details as an example of the information to look for or request from your financial institution. The Office of the Comptroller of the Currency, part of the U.S. Treasury Department, provides similar instructions on its website:
- Contact the merchant directly to revoke your authorization to charge your account.
- Keep a copy of your notice.
- Obtain a cancellation number from the merchant.
- Notify your bank in writing that the merchant no longer has authority to debit your account.
How to Write a ‘Stop Automatic Payment’ Request Letter
Many financial institutions do not give consumers a sample of the letter they should include when requesting that the merchant stop automatic withdrawals for bill payments. Bank of America, however, does. The company offers consumers a clear template in the form of a PDF titled “Cancellation of Automatic Payment Letter” that they can send to merchants to stop the charges.
Some regional banks offer their own templates, and the online do-it-yourself legal resource Nolo.com also offers sample letters. All of these templates include the following elements:
- The merchant’s name
- Your name
- The date of the letter
- Your statement that you are revoking authorization for and canceling the automatic withdrawals
- Your account number with the merchant
- Your bank account number
- The type of bank account the payment is being withdrawn from
- The date of the last automatic payment to be withdrawn
- Your signature
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How to Request a Stop Payment
In some cases, automatic payments might be processed between the time you send your letter revoking automatic withdrawal authorization and the time the merchant receives it. In order to prevent this from occurring, you can find out if your financial institution will stop payment on the account for you. A stop payment request is a separate action you can take in addition to canceling automatic payments from your account.
Wells Fargo’s website provides information about how to place a stop payment on an ACH item or on a check:
- You can request a stop payment for a check or ACH item by phone or by visiting a local branch and speaking with a banker.
- A stop payment can only be processed online for checks, not ACH items.
- For ACH items, the stop payment will remain in effect indefinitely; it will only remain in effect for checks for six months.
- There is a stop payment fee of $31 per ACH item.
- A stop payment order does not release you from contractual agreements.
To place a stop payment on an ACH item by phone, have the following information ready:
- Company name
- Account number
- ACH merchant ID and/or company ID, which can be found by reviewing a previous transaction
- Amount of item
How to Stop Automatic Debits From Your Bank Account
The Consumer Financial Protection Bureau, a government agency that works to enforce consumer finance market rules and empower consumers, provides similar guidelines for stopping automatic debits but also offers some additional details to help you stop payment orders successfully:
- Notify you bank of your request to stop a payment at least three days before the payment is scheduled to be debited from your account.
- Provide your bank with your written request to stop automatic payments within 14 days of your initial oral request.
- Pay attention to your accounts. If you notice an autopayment after you have revoked authorization in writing, then notify your financial institution immediately to dispute the unauthorized transfer and recover your funds.
- Don’t forget to cancel the service account or subscription with the merchant in addition to revoking their ability to automatically debit your account.
What to Do When Your Bank Won’t Stop Processing Autopayments
If you have difficulty with the process of revoking autowithdrawal authorization — or if your financial institution or a company is failing to stop automatic withdrawals after you have submitted your written request — you can submit a complaint to the CFPB. The CFPB allows you to easily submit a complaint through its website:
- Pick the financial product you are dealing with (e.g. loan, bank account, credit card, debt collection).
- Fill out the complaint submission form.
- Give the CFPB your contact information and the contact information for the bank involved.
- The CFPB will contact the bank to discuss the dispute and relay its findings to you.
- You can check the status of your complaint through the website.
You also can refer to the Electronic Fund Transfer Act for information about your rights. The act defines how financial institutions are obligated to disclose certain types of information, what consumers are liable for and other details associated with electronic fund transfers. Make sure to also check your financial institution’s disclosures for additional information specific to your automatic withdrawal situation.
How to Get Your Bank to Reverse ACH Payments
To dispute an autopayment and get your money back, you will need to contact the bank’s customer service department. You will likely need to fill out a form to get the payment reversed, but the process varies among financial institutions.
Have your bank account number, bank routing number, and information about the company that received the autopayment on hand to request the reversal. Many financial institutions charge a fee for payment reversals, but you might be able to request a fee waiver if you are a longtime customer in good standing. Be prepared that the reversal process can take several days to a week or more to complete.
How to Stop Autodebits by Other Companies
The processes for stopping autodebits tied to various types of accounts or EFTs are similar, but knowing the slight differences can help you end automatic withdrawals successfully — and potentially more quickly. The following sections offer guidelines for how to pursue automatic withdrawal cancellations for specific types of businesses.
How to Stop Automatic Withdrawals Linked to a Credit Card
Stopping automatic payments linked to a credit card for bills from places like a gym or cable company can be a hassle. Credit card companies like MasterCard and Visa generally require that you do the following to cancel autopayments:
- Contact the merchant or biller to follow their procedures for canceling a payment method.
- Contact your credit card issuer to ensure that the autopayments to that merchant are stopped.
Just like with autodebits tied to your bank account, you’ll need to monitor your credit card statements for any transactions that were processed after you submitted the autopayment cancellation. If you need to dispute a charge, you should do so in writing and by certified mail so that you have proof of sending the letter, according to the debt settlement site CreditInfocenter.com.
If you’re concerned about potential problems processing the cancellation, consider closing the credit card account. If the companies involved are failing to respond to you or are otherwise causing you problems, you can file a complaint with the CFPB or your state attorney general.
How to Stop Automatic Withdrawals From PayPal
Paypal makes it easy to cancel automatic payments. To do so, simply follow these steps:
- Log in to your PayPal account.
- Click on “Profile.”
- Click on “My Money.”
- Click on “Update” next to “My Preapproved Payments.”
- Select the payment you wan to cancel and click “Cancel.”
How to Stop Automatic Withdrawals From a Debt Collector
To stop automatic withdrawals from a debt collector, you should take the following steps, according to Nolo.com:
- Call the debt collector and tell them that all future withdrawals are unauthorized. Follow up your call with a written notification.
- Look for a section in the paperwork from the debt collector pertaining to an “Automated Clearing House Credit and Debit Authorization Agreement.” This section will give you specific instructions for that particular debt collector’s process for stopping automatic withdrawals.
- Inform your bank in person or by phone, as well as in writing, that such withdrawals to that company are unauthorized.
Letters that you send should include the date, your name, your address, and your account number with the lender. If possible, include a copy of the ACH authorization.
How to Stop Automatic Withdrawals by a Payday Lender
Payday lenders are being scrutinized by government agencies for predatory lending practices. If you want to stop a payday lender from taking automatic withdrawals from your account, follow these steps as outlined by the CFPB on its website:
- Determine whether the EFT was truly unauthorized. For example, did it occur after your provided written notification of revoking authorization for automatic withdrawals?
- Determine whether you need to stop one or more payments.
- Determine whether you need to revoke authorization for a specific number of payments or all automatic withdrawals.
- If the autodebits are unauthorized, notify your financial institution and follow its process for revoking automatic withdrawal authorization.
- If the transfers are not unauthorized, then follow the payday lender’s instructions on how to stop automatic payments. If the lender does not provide any instructions, then the authorization might be invalid.
- Whether or not the automatic withdrawal authorization is valid, notify the payday lender in writing to stop the withdrawals and state that you are revoking the company’s authorization to automatically withdraw funds from your account.
- Take or send a copy of the letter you sent to the payday lender to your bank or credit union. Tell your financial institution in person or by phone and in writing that further transfers are unauthorized and must be stopped or refunded to you.
- If the financial institution does not follow your instructions, submit a complaint to the CFPB online.
You can reduce the stress associated with canceling automatic payments and withdrawals by following the instructions specific to your financial institution and the company receiving your money. Monitor your accounts closely to prevent costly errors in autodebit processing and make sure you notify your bank or credit union immediately if you need to stop or dispute any autopayments.
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