How to Block ACH Payments From Your Account
Gain control over your finances by learning to manage automated bank debits. Get clear guidance on how to block future ACH payments or dispute past transactions.
An Automated Clearing House (ACH) payment is an electronic transfer of money between bank accounts processed through the ACH network. This system facilitates financial transactions like direct deposits for paychecks and automatic bill payments. This guide explains how to block or dispute ACH payments from your account, especially when preventing an unauthorized withdrawal or stopping a recurring payment.
Gathering Necessary Information
Before blocking or disputing an ACH payment, gather specific transaction information. You will need the exact name of the originator (the company or individual initiating the debit). Also, know the precise payment amount and the date it was scheduled or occurred. If available, the transaction ID can help your bank identify the payment.
Identifying the bank account number and routing number involved is also required. This set of details helps your financial institution accurately identify the specific ACH payment. You can find this information on your bank statements, through your online banking portal, or by reviewing agreements with the originator. Without complete information, your bank may not process your request efficiently.
Blocking Future Payments
To prevent an ACH payment, you have two methods: placing a stop payment order with your bank or revoking authorization directly with the originator. To place a stop payment order, contact your financial institution via phone, online banking, or in person. You must provide the information gathered earlier, including the originator’s name, payment amount, and scheduled date. Banks require this notice at least one business day before the payment is due.
Financial institutions may charge a fee for stop payment orders, ranging from $25 to $35 per request. These orders remain active for about six months. Alternatively, you can revoke authorization for future ACH debits directly with the originator. This requires sending a written notice, such as a letter or email, stating your intent to cancel future payments. This notice should include your account details and explicitly identify the specific authorization being revoked. It may require submission a certain number of days, such as three business days, before the next scheduled payment.
Disputing Completed Payments
If an ACH payment has already posted to your account and was unauthorized or erroneous, you can dispute it with your bank. Contact your financial institution immediately to report the transaction. You will need to provide the information collected earlier, which helps the bank identify the specific debit. Your bank may require you to complete an affidavit or provide additional documentation, such as a police report if you suspect fraud, to support your claim.
Consumer protection regulations, specifically Regulation E, provide rights regarding unauthorized electronic fund transfers. For unauthorized transactions, consumers have up to 60 days from the date the bank statement showing the transaction was sent to dispute the charge. Banks are required to investigate the claim and provide provisional credit to your account within 10 business days while the investigation is ongoing. Understanding these timeframes is necessary for successfully disputing a completed payment.
Important Considerations After Blocking
After blocking or disputing an ACH payment, monitor your bank account closely. Regularly checking your bank statements for several months helps ensure no further unauthorized debits occur. Maintaining thorough records of all communications related to the block or dispute is also advisable. This includes copies of stop payment orders, dispute forms, written revocations, and notes detailing dates and names of representatives you spoke with.
If you blocked a legitimate recurring payment, be aware that the originator might impose late fees or interrupt services, such as utilities or subscriptions. It is beneficial to communicate directly with the originator to make alternative payment arrangements or resolve the underlying issue to avoid repercussions. Always seek confirmation from both your bank and the originator that the block or dispute has been processed and acknowledged.