How to stop a payday lender from taking money from your account

Your right to stop debits

When you took the loan you may have signed an ACH authorization that lets the lender debit your account on the due date. You can take that permission away, which is called revoking authorization (CFPB ↗).

Step by step

1. Revoke with the lender. Call and write to tell the company you are revoking permission for automatic payments. The CFPB provides a sample letter (CFPB ↗).
2. Tell your bank. Let your bank or credit union know you have revoked the authorization; some offer an online form (CFPB ↗).
3. Give a stop-payment order. To stop the next payment, give it at least three business days before the debit — in person, by phone or in writing. If the bank asks for it in writing, provide that within 14 days (CFPB ↗).
4. Watch your account. You can dispute unauthorized transfers and get your money back if you tell your bank in time (CFPB ↗).

Sample revocation letter

Send this to the lender by email and by mail, and keep a copy. The CFPB also publishes its own sample letters (CFPB ↗).

[Date]
[Lender name and address]
Re: Loan number [number]

I revoke the authorization I gave you to take electronic payments from my account at [bank name], account ending in [last four digits]. Do not attempt any further electronic debits from this account, including re-presenting earlier payments or changing the amount.

I will contact you to arrange another way to pay. Please confirm in writing that you have received this notice.

[Your name]
[Phone and email]

Do not include your full account number, Social Security number or online banking login.

Costs and limits

• Banks commonly charge a fee for stop-payment orders (CFPB ↗).
• Revoking the authorization does not cancel the loan. You still owe the balance and should arrange another way to pay (CFPB ↗).
• Some lenders try a slightly different amount or a new authorization; tell your bank about any debit after you revoked.

What to do next

Contact the lender with a plan: an extended payment plan, a smaller payment date that works, or payment by another method. If the lender keeps taking money after you revoked, contact your state regulator or attorney general and submit a complaint to the CFPB (CFPB ↗).

Questions

Will stopping payments make the lender sue me?

It can lead to collection activity because the loan is still owed. A lender needs a court judgment to garnish wages or your bank account (CFPB ↗).

Should I close my bank account instead?

Closing an account does not end the debt and may bring its own fees. Revoking and stopping payments is the targeted tool.