An Automated Clearing House payment can be stopped by either the company that initiated the transaction or the account holder. The key to preventing the payment is to act quickly as ACH processing generally debits the checking account on the next business day following the transaction. Merchants can also reverse and re-enter payments under specific circumstances.
Stopping the Payment
An ACH transaction can be stopped at a bank or credit union as long as the account hasn’t already been debited for payment. Banks and credit unions must follow ACH rules when stopping a payment, but the process can be different at each institution. For example, some banks allow customers to place ACH stops either by phone or in person, while others accept a faxed stop payment form. To process a stop, the customer provides account information, the name of the merchant and the exact amount of the payment. The fee for stopping checks varies between institutions.
Stopping Automatic Payments
If you set up automatic bill payment, which is done using the ACH system, financial institutions generally require stop requests to be submitted 3 business days before the scheduled payment. To do so, you submit the name of each company and the amount of money being debited on a monthly basis.
A company can reverse an ACH transaction for an incorrect amount charged for goods and services, incorrect customer information entered into the system or duplicate orders. If the dollar amount for a reversed transaction is re-entered at a higher amount that results in a negative balance in your checking account, the bank is not obligated to honor the ACH. When this happens, your account may accrue charges for non-sufficient funds. Under ACH rules, reversals must be entered into the system within 5 business days of the transaction.