A friend of mine received a loan from Avant a few months ago. Although the payments fit into his budget, the timing did not. Living paycheck to paycheck is difficult enough without having a company withdraw money on odd dates. Since the company did not give him the option to change the withdrawal date, he decided to revoke authorization for automatic payments altogether.
Avant doesn’t allow you to do that. At least, not officially. Any attempt to remove authorization through the company will be met with opposition – and that makes sense, because it removes the guarantee of payment.
But it doesn’t matter what Avant or any company does or doesn’t allow because federal law allows you to revoke autopay authorization at any time.
In fact, if the original ACH authorization agreement didn’t include instructions to stop payments, the entire authorization may be invalid and you may be able to recoup all the money that has ever been taken by the company! If your original paperwork doesn’t include instructions on stopping ACH payments, you should consult with a lawyer because this may invalidate the entire agreement – which may mean you don’t have to pay the debt at all! Again, I am not a lawyer or a legal professional so you will want to confirm this with someone who is more knowledgeable than I am.
The ability to stop payments is wonderful for consumers, especially when you consider that almost a third of payday loan borrowers overdraft when the payments are withdrawn. Statistics are surely similar for other loans and debts that are accrued by people who survive paycheck to paycheck.
- Contact the merchant directly and revoke your authorization to charge your account.
Although you technically can make this request verbally, the verbal request is ineffective after 14 days if any requests for written confirmation are made… so it’s easier just to start with a written request. I’ve drafted a sample ACH Revocation Letter that you are welcome to use! Just print it out, fill it out, sign it and send it!
2. Keep a copy of your revocation notice or obtain a cancellation number.
You will need to keep a copy of your letter and, preferably, proof that you sent it. I recommend sending it through email or via standard mail with signature confirmation. This will help you prove that you sent the revocation notice.
If the company sends you a cancellation number, keep that in your records also.
If the company attempts to automatically withdraw money from your bank account again, these documents will help you get your money back.
3. Notify your bank about the revocation notice.
Submit a copy of the records you have from the previous step to your bank. As long as you notify the bank at least three business days before the next scheduled payment date, they can stop the transaction from occurring.
If you notify the bank and the bank still allows the payment to process, you must respond to the bank in writing within 60 days. You can use this Bank Dispute Letter, if you need to.
Once the bank receives your dispute, they have 10 days to investigate and one more day to restore the funds. Even if they can’t recover the money from the company who initiated the withdrawal, they are still required to restore your funds. If they don’t, you can sue for the money you lost (including fees), lawyers fees and a penalty of $100-$1,000. If it is proven that the bank acted in bad faith, they can be found liable for up to three times the amount of money you lost.
And now, a word of warning…
Please remember that stopping payments doesn’t stop your obligation to the debt. You will still owe the debt. If you don’t pay on time, your credit report will be affected and the debt may be referred to collections or even court. The only thing that stopping payments will do is protect the money in your bank account from being withdrawn.