Many payday loans require the consumer to set up automatic payments when it comes to repaying the loan. While this is often not a big deal at the beginning, if you find yourself in a financial bind down the line, it could end up putting you right back into the same tight spot that caused you to get the payday loan in the first place. So what options do you have if you want to stop ACH withdrawals before they cause problems? Typically you have to go through your bank to stop the payments. Here’s how.
Contacting Your Bank
The first thing you need to do is contact your bank. You will need to do this at least three days before the withdrawal is due to hit your account in order for a bank to attempt to stop the withdrawal. You will need to tell the bank the amount that is supposed to come out of your account, the name of the company making the withdrawal, and a date the withdrawal is due to hit the account. Your bank will then attempt to stop the withdrawal from coming directly out of your account.
Contacting the Payday Loan Lender
You can either contact the payday lender in writing or contact by phone if possible, but it is recommended you put all of your correspondence in writing so you have a copy of what has been said. Explain your situation and let the lender know that you want to stop ach withdrawals from your account. Most lenders request that you put a reason with your inquiry. They will then inform you if they are willing to stop the withdrawals after this request, but not all lenders do.
What Happens When Your Contacts Don’t Work?
If after you have contacted your bank and the lender, the ach withdrawals have not stopped, you need to again contact your bank. Assuming that you contacted them with enough time to stop the withdrawal and the bank released the funds anyway, you will need to notify your bank that this was not something the bank had permission to do. You will want to do that in writing within 60 days of the withdrawal. The bank is then given ten days to investigate what happened, plus one extra business day to replace the money that was released from your account. Should the bank not have gotten reimbursed for your funds yet, the bank is then responsible to replace your money instead.
Why Aren’t ACH Withdrawals Easy to Stop?
The basic reason why you can’t stop ach withdrawals quickly or easily is because both the lender and the banks want their money. Banks get extra money any time your account is overdrawn, and allowing the ach withdrawals to go through often times overdraws accounts. Payday loan lenders want to get their money back that was lent out, and it’s a lot easier to rely on money that is automatically set to come in than to wait for a customer to drop off a check or cash each week. You borrowed the money, so most lenders believe that once ach withdrawals are set up, they deserve the payments to stay as arranged as a way of ensuring they are repaid.
Be Aware of Your Rights
If you need to stop ach withdrawals, you need to take the proper steps and contact the right institutions. Try and keeps all of your correspondence in writing so you have copies of what has transpired, thus protecting yourself if anyone questions the chain of events. If you find yourself in a situation where you must have the ach withdrawals changed or you would prefer to make payments a different way, then you need to make sure you read through your agreement to see what repayment rights you have, and then ask for those rights to be enforced.