Once you have entered an agreement with a lender that offers instant cash payday loans it does not mean the lender has control of your finances. There may be instances when you do not want the lender to remove money from your bank or credit union account. You may simply not have all the funds in place to complete the transaction, or there may be something unfair about the money transfer. Here are steps you can take to prevent the transaction from occurring.
Inform Bank of Unauthorized Transfers
If a payday lender attempts to take too much money or make an unexpected transfer from your account, you can inform your bank that you are having problems with “unauthorized transfers.” Federal law actually requires a bank to take certain steps to prevent these transfers once you have notified them.
Your loan agreement may provide details on electronic payments that occur at regular intervals. These scheduled repayment installments can be stopped when you give your bank at least three business days written or oral notice. The bank may charge a fee for stopping payment. Whether you have used instant cash payday loans or have set up other scheduled payments, the series can be stopped when you believe there is a problem with the transactions.
All bank account holders are entitled to revoke authorization that allows lenders to take money from an account. You simply need to inform the payday lender to stop attempting to withdraw money from your account and follow the initial instructions involving stop payments. The authorization may be invalid if there were no initial instructions.
To ensure that authorization has been canceled, notify the lender in writing that “my authorization to debit my account is revoked.” Give a copy to your bank and keep a copy for yourself. If the financial institution does not honor your instructions, you should contact the CFPB.