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How to Cancel Automatic ACH Payments

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Mark Cappel
UpdatedMay 20, 2024

I have a dispute with a vendor that is debiting my account. If I close that account and open a new one, will the payments stop?

I have a dispute with a vendor that has been authorized to debit my account each month. According to my bank, the only way I can stop this monthly payment is to either have the vendor cancel the automatic debit, or close the account. I'm OK with closing the account. But my question is this: if I happen to have a second, different account at that bank, can the vendor (or the bank) satisfy the vendor's automatic debit requests through that second account without my authorization once I close the original account?

If the vendor has been using electronic checks or the Automated Clearing House (ACH) system to debit its payments, transferring your funds into a new bank account should prevent any further payments to the vendor, since one of the pieces of information needed to initiate an electronic check or ACH transaction is the number of the account from which the funds are to be withdrawn.

If you authorized the payments using a debit card tied to your bank account, you should make sure that you cancel your old card when you open the new bank account, and verify with the bank that payment requests presented using your old debit card will be refused.

An Important Step

The other action I would recommend is to check with your bank to make sure that the new account is not in any way tied to the old account, and to verify that any attempts to debit money from your old account will be returned unpaid. This is an important step: I had a family member who closed an account for reasons similar to yours, and opened a new account within the same bank. Unfortunately, the bank tied all of the account information from the old account to the new one, and charges continued despite the new account number.

Closing your current bank account should prevent the vendor from debiting any future payments. Nonetheless, I recommend that you try to resolve your dispute with the vendor, if at all possible. An unresolved payment dispute could result in the vendor filing a lawsuit against you; even if you win the case, hiring a lawyer to represent you could cost you much more money than is actually in dispute. If the vendor wins a judgment, you could be forced to pay the original debt, interest, court costs, and the vendorÂ’s legal fees, in addition to your own attorneyÂ’s fees.

I strongly encourage you to try to negotiate some sort of settlement with the vendor so that you do not risk this much costlier outcome. Even if the vendor does not sue you for the money it claims you owe, it would be wise to try to resolve the dispute amicably to avoid the damage to your business reputation that a disgruntled vendor. Vendors frequently provide goods and services on credit; if this vendor defames you to others in its industry as a deadbeat, you may have a hard time obtaining the goods or services you need to operate your business, regardless of how reasonable your original complaint may have been.

I hope this information helps you Find. Learn & Save.



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VVirginia, Jan, 2012
Just looking for an answer to the same dilemma my mother is in. SHE was informed that even if she closed the account and reopened a new one somewhere else, the first ACH or EFT that came through would keep the 'closed' account active. This bank did this to me, so I know personally. And not just the bank, my credit union gave the same answer. So what is a person to do in THAT case?
BBill, Jan, 2012
The customer service representative did not explain everything. If a party making unwanted ACH withdrawals does not cease doing so after receiving a written request to stop, the account holder should send a statement to the bank or credit union explaining the situation. Some banks and credit unions have forms their customers can use for this purpose. Others do not, but the general rule is the same.
bbianca, Jun, 2011
I was in a similar ACH transaction situation myself with an online DVD business. I moved my funds to a new account, which did stop the payments. I was then able to take the time to get the situation rectified, without having to worry about further money being wrongfully taken from me. It's definitely a risk you take when you sign up for that sort of thing. It happens frequently.
BBill, Sep, 2010
Please review the original answer above for the answer to your question.
SSylvia, Sep, 2010
I also am in a similar situation. What is the probability of the company of still charging me if I close my bank account and open a new one in a different bank?
BBill, Nov, 2009
It should not impact your credit rating if you place a stop payment on your bank account from that ACH draft source.In fact, your bank most likely does not report your checking account to the credit bureaus. So, if I were you I would place a stop on those drafts at your bank account immediately.
KKristen Cole, Nov, 2009
I am in the same situation with a gym membership but they closed down and they continue to take out money from my account. If i close my account or stop payment will this affect my credit negatively. I have very good credit at this time. The did not leave a notice or anything on the door stating that they honored another contract at another gym. They just picked up an left. I will close my accounts if I have to but I do not want this to go on my credit. Please help me.