How to Cancel ACH Payments From Your Bank Account

The Automated Clearing House (ACH) network facilitates many electronic transfers between bank accounts. Understanding how to manage these payments, including stopping or disputing them, is important. This guide provides information on methods available to consumers for addressing ACH payments.

Information Required for Cancellation

Before attempting to cancel or dispute an ACH transaction, gather specific details. This information helps your bank or the originating company identify the transaction. You will need the exact transaction date, the precise payment amount, and the name of the company or individual that initiated the transaction, often called the originator. Additionally, provide the bank account number involved and any authorization details, such as a confirmation number or a copy of the authorization form. Having these details ready streamlines the process.

Canceling a Pending ACH Transaction

Stopping a single ACH payment that has been initiated but not yet cleared requires prompt action. ACH payments typically take a few business days to settle, providing a brief window to intervene. Contact your bank directly as soon as possible. Many banks require a stop payment request at least three business days before the scheduled payment date. Some financial institutions may allow cancellation over the phone or online, while others might require a written form. Provide transaction details, such as the payment amount, recipient’s name, and scheduled date. A fee, typically ranging from $15 to $35, may apply. If the payment has already begun processing or cleared, stopping it directly may not be possible, and a reversal process might be necessary.

Stopping Recurring ACH Payments

To stop future, recurring ACH debits, the primary approach involves revoking authorization with the company or merchant. Consumers have the right to cancel authorization for recurring ACH payments at any time. Contact the originator first and inform them that you are withdrawing your authorization for future debits. This request should ideally be made in writing, and most companies require at least three to five business days’ notice before the next scheduled withdrawal. If the originator does not comply or you are unable to contact them, notify your bank to stop future debits from that specific company. Banks are generally required to honor such requests if they receive notice at least three business days before the scheduled payment date. Your bank may require a written stop payment order within 14 days of your verbal notification. Stopping a payment through your bank without the merchant’s cooperation could lead to late fees or penalties from the merchant for non-payment.

Disputing Unauthorized ACH Debits

When an ACH transaction occurs that was never authorized by the account holder, consumer protections under federal regulations apply. Regulation E, which implements the Electronic Fund Transfer Act (EFTA), safeguards consumers against unauthorized electronic fund transfers. An unauthorized transaction is defined as one initiated by someone other than the account holder without actual authority, from which the consumer receives no benefit. To dispute an unauthorized ACH debit, notify your bank promptly. Consumers generally have up to 60 days from the statement date on which the unauthorized transaction appears to report it to their financial institution. Upon notification, the bank is required to investigate the claim. You may need to complete a signed form or affidavit providing transaction details and the reason for the dispute. If the bank determines the transaction was unauthorized, they must correct the error and refund your money, potentially with a provisional credit during the investigation period, which can last up to 45 days.