How do you stop automatic withdrawals from bank account

If you agree that someone can take a payment from your credit or debit card at a future date, known as a continuous payment authority, you can cancel the payment before it is taken. This applies to:

• one-off payments, for example to pay back a payday loan
• regular payments, such as payments for a gym membership or magazine subscription.

The rules about cancelling future card payments do not apply to card purchases for goods or services, such as in a shop or paying a hotel bill.

This page tells you about when you can stop a card payment, how to stop card payments and what to do if the card provider doesn't put things right.

Top tips

You'll still have to pay for the goods or service

If you stop payments which relate to another agreement, such as a loan or to pay for a club or gym membership or a magazine subscription, you’ll need to make another arrangement to pay the money you agreed.

Stopping a card payment

The law says you can withdraw your consent and stop a future payment under a continuous payment authority at any time up to the end of business on the day before the payment is due.

To withdraw consent, simply tell whoever issued your card (the bank, building society or credit card company) that you don’t want the payment to be made. You can tell the card issuer by phone, email or letter.

Your card issuer has no right to insist that you ask the company taking the payment first. They have to stop the payments if you ask them to.

If you ask to stop a payment, the card issuer should investigate each case on its own merit. They should not apply a blanket policy of refusing to refund payments taken when the client gave their account number out.

You should point out to the card issuer that they should follow the Financial Conduct Authority (FCA) guidance on unauthorised payments from your account. 

Cancelling the payment by phone

If you phone, it's a good idea to follow up the call in writing so you have proof of your instruction to cancel. But the company should take your phone call as the instruction and stop the arrangement straight away, not wait for you to confirm in writing.

If the person you speak to says you can't stop the payments, ask to speak to someone more senior. If they still won't stop the payments, ask them to put a record of the call on your account so you can refer to it later if you need to. Make sure you keep a note of the date, time and who you spoke to as well, in case you need to make a complaint.

If the card provider won't stop the payments

If the card provider goes ahead and allows a payment to be taken when you ask them not to, you're entitled to your money back. They'll also have to cancel any interest and charges added to your account because they let the payment go through.

Getting your money back

If your bank, building society or credit card company doesn't refund your money for a payment they shouldn't have allowed, write and ask for your money back under the company's complaints procedure.

If you're still not satisfied, you can complain to the Financial Ombudsman Service.

You can contact the Financial Ombudsman Service helpline on 0300 123 9 123 or visit the website at: www.financial-ombudsman.org.uk.

Get help with bills and budgeting

If you're trying to cut your spending, or are having problems with your outgoings, you could get help with bills. You could also use our budgeting tool to see exactly where your money goes each month.

Page last reviewed: 20 February 2020

For the most part, automatic payments are very helpful. They eliminate the need to manually pay subscriptions, bills, and other debits. 

However, they can also be a pain to stop sometimes. You may have canceled a subscription long ago, but the payments keep on rolling in, nevertheless.

This post will explore the different types of payments coming out of your account and show you how to stop automatic payments.

Automatic withdrawals are financial facilities that automatically debit one account and credit another. For instance, a bank might take money out of your checking account each month and deposit it into a utility company’s account. 

Automatic withdrawals can vary from month to month, or they can be fixed. For example, you might pay different amounts on your water bill but get charged the same by your mobile network provider.

Preauthorized debits are a temporary hold on your credit card that usually lasts around five days. Here, merchants place a claim on the money in your checking account in advance before it leaves. Their goal is to reduce costly chargebacks, which can affect merchants’ standing with credit providers and banks. 

Steps To Stop Automatic Payments

Unfortunately, financial institutions, such as major banks do not always offer quick and easy ways of stopping automatic payments. You may be able to cancel automatic payments online, but sometimes extra steps will be needed. Let’s look at some of the options you’ll have at your disposal.

Cancel Via Autopay

In some cases, you may be able to stop automatic withdrawals through auto-pay. To do this, log in to your merchant account (the one provided by the company whose service you are using and paying for) and look for an option to stop your debit payments. 

If you want to continue with the service, you may opt to pay in a different way, such as by check. If you don’t want to continue and you’re not locked into a contract, you should be able to cancel it outright. The merchant will then send you an email telling you that they’ve stopped automatic payments. 

Contact The Company Directly

If you don’t have any luck with autopay and you can’t cancel online, you could try doing so over the phone. If that fails, too, you should then request to stop an automatic payment by contacting the business directly. To do this, you’ll need to write a letter asking them to stop the automatic payments. 

There are templates available for letters that revoke the authorization for charging automatic payments, which vary slightly from bank to bank. However, they must contain the following information: 

• The name of the company or merchant debiting your account
• Your full name as it appears on your bank statement
• The date when you signed the form
• A statement that you want to revoke authorization for the automatic payment
• Your account number
• The merchant’s account number
• The type of account from which funds are being withdrawn
• Your signature
• The date of the most recent withdrawal

With this information, the bank should be able to prevent an automatic debit payment from happening again. Once you send the letter, make sure that you keep a copy for yourself, just in case there are further issues down the line. 

Request a Stop Payment Order

If canceling online, over the phone, or via a letter doesn’t work, you may want to request a stop payment order form from your bank. These formal documents compel banks to stop automatic debit payments you did not authorize or no longer want. 

As a general rule of thumb, you must make these requests before the merchant withdraws the money from your account. You may not be able to recoup money that has already left your account.                                                                 

In most cases, you will need to write a stop payment order and deliver it to the bank by yourself. However, some banks allow you to perform these orders over the phone. 

What To Do if the Bank Won’t Stop Processing Automatic Payments

If the bank does not stop payments even after a written request, you can submit a complaint to the Consumer Financial Protection Bureau (CFPB). 

To do this: 

1. Log onto the CFPB website.
2. Fill out the complaint form and submit it.
3. Provide the CFPB with your contact details and information about the bank involved.

Once you submit the relevant information, the CFPB will contact the bank on your behalf to learn more about the dispute and why it isn’t canceling the automatic withdrawals. It’ll then report back to you. Sometimes, there is a good reason why automatic payments aren’t stopping, and it could be a court-mandated decision. 

Once you’ve created a CFPB account, you can check the status of your complaint via the agency’s website. 

Can You Reverse Automatic Payments? 

In some cases, you may be able to reverse automatic Automated Clearing House (ACH) payments. To do this, you’ll need to contact your bank’s customer service and then fill out a form. You’ll need to provide information about the merchant receiving payments from you, your bank account number, and your bank routing number. Banks typically charge a fee for this service. However, you may be able to request a waiver if you are a long-term customer in good standing. 

Conclusion

Stopping automatic payments can be a hassle. Learning how to stop automatic payments is easy, but you will need to arm yourself with patience. Work through the list above, starting by going to the merchant and then falling back on the CFPB if necessary. 

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