You can stop electronic debits from your account — even if you previously authorized them — by simply revoking it. Generally, your account would be automatically debited to pay off a payday loan if you sign a payment authorization known as an ACH authorization. You can do the following to stop these automatic electronic debits.
How to revoke ACH authorization?
Speak to the payday lender
Email or call the payday lender and let them know you intend to withdraw your consent to automatic debits to your bank or credit union account. Your loan contract may contain a section that describes how to revoke authorization should you want to in future.
This is usually in the promissory note part of the contract and may be captioned "Automated Clearing House Credit and Debit Authorization Agreement". If it doesn't contain this, you may;
Call your bank or credit union
Write or call your bank or credit union to let them know you have now revoked authorization to automatic debts you previously granted your pay lender. Some banks and credit unions may give you an online form to get you started. If not, you can try this sample letter designed by the Consumer Financial Protection Bureau (CFPB).
Stop payment
You can also give your bank a "stop payment order". With this order, you can instruct your bank to stop taking payments from your account to service a debt. This order should be given at least three days before the next payment schedule.
The order can be given over the phone, in writing, or in person. A written order is most preferred if you want to stop future payments. If the bank specifically asks for this, ensure to provide this within 14 days of the request. Note that most banks would charge a fee for stopping payment orders.
Follow up
Did you get another automatic debit post-authorization revocation? Tell your bank or credit union. Federal law allows you to dispute and receive reimbursement for any unauthorized transfers from your account if you notify your bank in time for them to take action.
Be informed that revoking your payment authorization is not equal to cancelling your contract with your payday lender. You still owe the balance on that loan but can now choose to pay another way.
You can submit a complaint to the CFPB or call them at (855) 411-2372 if you have a problem stopping a lender from automatically debiting your account. You can also contact your state regulator or attorney general.