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Answers about Pre-Authorized Payments and Automatic Withdrawals

Select from the following questions about pre-Authorized payments, automatic charges, and automatic withdrawals.

I canceled a service after the free trial period, but the merchant continues to charge my checking account every month. How can I stop this?

Contact the merchant in writing, and provide the date (or dates) on which you instructed the merchant to cancel the service. In the letter, provide information on how you cancelled the service or provide a copy of the notice. Tell the merchant to cancel both the service and the charges to your account. You should maintain a copy of this letter for your records.

You should also notify your bank that you no longer authorize these charges. If you are asserting that the charges already debited were not authorized, and the merchant did not issue credit for those charges, the bank may request that you complete an affidavit. The bank will investigate your claim.

You can ask your bank to place a stop payment on a preauthorized transaction. To stop payment, you need to notify your bank at least three business days before the transaction is scheduled to be made. The notice to stop the transaction may be made orally or in writing. A bank can require written confirmation of an oral stop payment request. If the written confirmation is not received within 14 days of the oral notice, the oral stop payment order ceases to be effective.

My checking account has unauthorized monthly charges/withdrawals from a merchant. The charges started eight months ago, but I just noticed them. The bank will not reverse the charges. How can I stop this?

Immediately notify the bank. Identify by date and dollar amount the transactions that you did not authorize. The bank will review your claim. The bank may ask you to complete an affidavit of unauthorized use.

You must report any unauthorized electronic transaction that appears on your account statement within 60 calendar days of the bank's transmission of the statement in order to avoid liability for any subsequent transfers. Therefore, it is important to review your account statement upon receipt.

If the charges have been ongoing for eight months, the bank can take into consideration when the first disputed transaction posted to the account, and when the bank sent you the periodic statement reflecting that first transaction. If the same merchant has been billing you for eight months, and you failed to notify the bank in a timely manner, you, as the account holder, may be liable for some of the transactions.

I just noticed a charge on my statement that I did not authorize. That same charge appeared on my prior statement as well. What should I do?

You should notify the bank immediately of the issue. Identify by date and dollar amount the transactions that you did not authorize. The bank will review your claim. As part of the process, the bank may ask you to complete an affidavit of unauthorized use.

There are three possible tiers of consumer liability for unauthorized electronic fund transfers depending on the situation. A consumer may be liable for up to $50, up to $500, or an unlimited amount depending on when the unauthorized electronic fund transfer occurred.

The timing of your notice to the bank is critical. To avoid liability for subsequent transfers, you must report to the bank any unauthorized electronic transaction that appears on your checking account statement within 60 calendar days of the bank's transmittal of the statement. The bank may hold you liable for any transactions that occurred more than 60 days after the statement was transmitted and before you notified the bank.

I closed my checking account, but the bank continued to accept the recurring charges from my insurance company. Why doesn't the bank reject these charges?

Generally, it is your responsibility to cancel all recurring charges before closing an account.

The original agreement to charge the account was made between you, as the accountholder, and the merchant. You probably provided the merchant with written authorization to debit your account. Because the bank was not a party to that agreement, they cannot cancel it for you. You need to instruct the merchant to cease debiting your account.

Last year I gave a vendor/merchant authorization to make a monthly automatic withdrawal from my checking account. Now I have canceled the service, but my bank won't stop the withdrawals. What can I do?

Write directly to the vendor/merchant to request no further debits to your checking account. You should provide the bank with a copy of the letter and inform the bank that these charges are no longer authorized. Keep a copy of the letter for your records.

You can contact your bank and place a stop payment order on the transaction. Generally, a stop payment order is only good for one transaction.

To stop payment, you will need to notify your bank at least three business days before the transaction is scheduled to be made. Notice may be made orally or in writing. However, if the notice is made orally, the bank may require you to follow up with written notice within 14 days. If you don't provide written verification of the oral notice when required, the oral stop payment order ceases to be effective.

How can I stop a pre-authorized debit from being paid from my checking account?

You will need to notify your bank at least three business days before the scheduled date of the transfer and inform it that you wish to stop payment. You can provide the notice orally, but the bank may require you to confirm the request in writing. If the bank requires written verification of an oral notice, the bank will provide the address where the confirmation should be sent. The oral request ceases to be effective after 14 days if the bank requests written confirmation and the written notice is not received.

If you had authorized the merchant to charge your account and you want to stop the merchant's ability to debit the account for future transactions:

• you should contact the merchant directly and revoke your authorization to charge your account;
• you should keep a copy of your notice revoking authorization to charge or obtain a cancellation number; and
• you should notify the bank that the merchant no longer has authority to debit your account. It may be best to provide the notification in writing.

If you have revoked authorization and the merchant continues to charge the account, you can dispute the transactions with the bank.

If you authorized the bank to make the transfer to the merchant on your behalf, you need to revoke your authorization to make the transfer with the bank.

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