Alabama Attorney Ron SykstusMany times creditors and debt collectors will coerce, usually by harassment, people into allowing them to take money directly from their checking or savings bank accounts. You have an absolute right to stop this seizure of your money at any time. Additionally, prior to doing so, the creditor or debt collector must issue written notification to you of the intent to take money from your bank account at least five days prior to the transaction where the money is taken. The law that applies here is called the Electronic Funds Transfer Act (EFTA), it can be found here.  The  specific citation for this law is found under the grouping of federal consumer protection laws and is located at 15 U.S.C. section 1601.

If a creditor or debt collector is taking money from your bank account and you want to stop the seizure of money, please notify your bank and tell them to issue a stop payment on it. Your bank will probably charge you $20 to $30 to do so. The second thing you must do is to write the creditor or debt collector that is taking your money a letter that says that they are no longer allowed to take any money from your bank account located at (name of bank)  under account number (bank account number).  You can further say in this letter that you terminate any authorization for them to access any money from your bank account and that they should never touch your bank account again or take any money from you. Make sure you sign and date the letter and mail it to the creditor or debt collector by certified mail, return receipt requested and keep a copy of what you mail. Secondly, as mentioned above, please keep the originals of all letters you get from any creditor or debt collector who says that they are taking money from your bank account. Oftentimes, they will not mail this letter to you and this violates Electronic Funds Transfer Act.  We are seeing this repeatedly now especially with payday lenders and cash loan places so it is very important to be aware of your rights.  If your rights have been violated under this law, you may be able to sue the creditor or debt collector in federal court.

Our office handles cases under the electronic funds transfer act. If you would like to discuss your situation with one of our licensed attorneys, please contact the office nearest to you.

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Ron Sykstus
Written by Ron Sykstus

Ron Sykstus is a Managing Partner of several of the Bond & Botes Law Offices throughout Alabama. He holds a Bachelor of Science from the University of Arizona, Tucson, and a Juris Doctorate from the Northern Illinois University College of Law. Ron has served in numerous positions throughout the U.S. Army and now utilizes his expertise in the areas of VA issues, security clearances, military law, and bankruptcy to assist his clients when they need it most. Read his full bio here.

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