A pre-authorized debit is you handing a company a key to your bank account. Most of the time it is convenient. The problem starts when you want the key back and the company is slow, or when a withdrawal shows up that you never agreed to.
The good news is that Canada has clear rules for both situations, and they are on your side. You can cancel the arrangement, you can force a single payment to be stopped, and you have a 90-day window to claw back money that came out when it should not have. Most people never find out any of this, so they just keep paying. You do not have to.
The short answer
To stop future withdrawals: cancel the pre-authorized debit agreement in writing with the biller, and keep a copy. Under the national payments rules the biller must cancel it within 30 days of your notice.
To claw back a withdrawal that should not have happened: you have 90 calendar days from the date the money left your account to report it to your bank and get it back, by signing a short declaration. This covers debits taken after you cancelled, on the wrong date, or for the wrong amount.
One thing to understand before anything else, because it trips up almost everyone: cancelling a pre-authorized debit does not cancel your contract with the company or the money you owe them. It only changes how you pay. More on that below, because getting it wrong can send an account to collections.
First, know which kind of payment you are dealing with
How you stop a recurring charge depends entirely on how it was set up, and the two get confused constantly.
| Pre-authorized debit (PAD) | Automatic payment you set up | |
|---|---|---|
| Who pulls the money | The biller pulls it from your account | You push it to the biller |
| Examples | Gym, insurance, a loan, a subscription that took your void cheque or bank details | A recurring bill payment you scheduled in your own online banking |
| How you stop it | Notify the biller in writing, and use the rights on this page | Log in and cancel it yourself, any time |
FCAC draws the line this way: an automatic payment does not give the biller permission to withdraw money from your account. You arranged it, so you can modify or cancel it yourself at any time, usually right inside online banking. If that is what you have, you are done in two minutes and the rest of this page is a backstop.
A pre-authorized debit is different. You filled out a form, or clicked through terms, or gave a company your banking details or a void cheque, and that gave them standing permission to reach in and take money. Turning that off takes the steps below. If you are not sure which one you signed up for, look at whether you handed over your account number or a void cheque. If you did, it is almost certainly a pre-authorized debit.
How to cancel a pre-authorized debit the right way
Do these in order. The written record is what protects you if the company keeps charging you anyway.
Step 1: Tell the biller in writing that you are cancelling
To cancel a pre-authorized debit agreement you must notify the biller in writing. Email or a message through their portal is fine as long as you keep a copy. Your original agreement is supposed to include instructions on how to cancel, so check it. Say clearly that you are revoking authorization for pre-authorized debits from your account, give the date, and ask for written confirmation. Under Payments Canada Rule H1 the biller must cancel the agreement within 30 days of receiving your notice.
Step 2: Watch your account and confirm the debits actually stop
Once you have cancelled, check your account records over the next billing cycle to confirm no more pre-authorized debits go through. FCAC's own advice is direct about this: after you cancel, verify the withdrawals stop, and if they continue, contact the biller again.
Step 3: If a debit still goes through after you cancelled, claim it back
A withdrawal taken after you properly cancelled is money you have a right to recover. You have 90 calendar days from the date it came out to seek reimbursement through your financial institution. That process is in the reimbursement section below.
When you cannot wait: a stop payment on the next debit
Cancelling with the biller is the clean fix, but it does not always land before the next withdrawal date. If a debit is about to hit and you need it blocked now, you can go to your own financial institution and request a stop payment.
- A stop payment can block a single upcoming payment, and you may also be able to put a stop payment on a recurring pre-authorized debit.
- Ask your financial institution how much time it needs to process the stop payment, because it is not always instant, and a debit already in progress may be too late to catch.
- Your institution may charge a fee for a stop payment. Ask what it is before you request it.
A stop payment is a blunt instrument. Like cancelling, it does not end your contract with the biller or the money you owe. Use it to buy time and stop the bleeding, then still send the written cancellation in Step 1 so the arrangement is properly closed.
Your 90-day right to get the money back
This is the part worth memorizing, because it turns a debit you did not agree to from a fight into a form.
If a pre-authorized debit comes out of your account and it should not have, contact the biller directly first and ask for your money back. You have a right to a refund if:
- the debit was made on the wrong date or for the wrong amount, or
- the agreement had been cancelled.
If the biller will not fix it, your financial institution will. Here is how the window works, straight from FCAC:
- You usually have 90 calendar days from the date the funds came out of your account to report the problem to your financial institution and ask for your money back.
- Your financial institution does not have to reimburse you if more than 90 days have passed, so do not sit on it.
- You will have to sign a declaration confirming the reason for reversing the debit. This is a standard one-page statement, not a court process.
One limit to know. You may not be able to get the money back if the pre-authorized debit was a transfer of funds from your account at one financial institution to your account at another one you own. Those transfers between your own accounts are treated differently, so check your institution's specific policy if that is the situation.
If the amount was wrong, or larger than expected
A common trigger for the reimbursement right is a debit that is bigger than you were expecting. The rules here are specific.
If your pre-authorized debit agreement is for a variable amount, meaning it changes from one payment to the next, the biller must give you written notice of the amount at least 10 days before they withdraw the funds, unless you agreed to waive or shorten that notice period. So a company that quietly increases your monthly charge and takes the higher amount without the required notice has given you a clean ground to dispute it.
Two related protections in the same rules:
- If your agreement does not define the frequency, or the frequency is variable, the biller must get your approval for each pre-authorized debit.
- If you set up the agreement electronically or by phone, the institution should send you a written confirmation at least 3 days before the first withdrawal, with the details of the agreement. If you never got that confirmation, that is worth raising.
What the agreement was supposed to give you
A valid pre-authorized debit agreement under Payments Canada Rule H1 is not just your signature on a blank permission. It is supposed to set out the amount and whether it is fixed or variable, how often the money comes out, how to cancel, the biller's contact information, and your recourse rights if something goes wrong. If you are digging into a dispute, ask the biller for a copy of the agreement you signed. If it is missing the cancellation instructions or the recourse information, that strengthens your position.
If the biller or bank ignores you
Most of these resolve with the written cancellation and the reimbursement claim. When they do not, there is a formal path, and it is free.
Step 1: File a complaint with your financial institution
You can file a complaint with your financial institution about any unauthorized debit going through your account. Every federally regulated financial institution must have a complaint-handling procedure, published on its website and available at its branches. Put it in writing and keep the file open. The bank must give you a detailed written response within 56 calendar days of when you first made the complaint.
Step 2: Escalate to the banking ombudsman
If the bank has given you its detailed written response and closed the file, or more than 56 days have passed, you can take the complaint to the Ombudsman for Banking Services and Investments. OBSI is independent and free to use, and it is the route to an actual remedy. FCAC oversees whether banks follow their legal obligations, but it does not resolve individual complaints or get your money back for you.
The full contact details and the timelines OBSI works to are laid out in our guide to your rights and the exact complaint path, which walks the same escalation from the bank's own process through to the ombudsman.
The real prevention: see every debit the moment it happens
Most surprise withdrawals only become a problem because nobody notices for weeks, and by then part of the 90-day window is gone. An account that pings you the instant any money moves changes that. KOHO is a Canadian prepaid Mastercard account with no monthly fee on its free plan and a real-time notification on every transaction, so a debit you did not expect shows up on your phone the same day instead of on next month's statement. It is a prepaid spending account, not a full chequing replacement, so keep it as a place you control tightly rather than your only account. Check current plan features and any fees on the provider's own page before you sign up.
See how the account worksFive things to take away
- Cancel in writing with the biller, keep a copy, and they must cancel within 30 days.
- A stop payment blocks the next debit now, but ask about timing and any fee, and it does not end your contract.
- You have 90 calendar days to claw back a debit that was unauthorized, on the wrong date, for the wrong amount, or taken after you cancelled.
- Get knock-on NSF charges reversed too, not just the original debit.
- Cancelling the debit is not cancelling the deal. Settle what you owe separately so nothing goes to collections.
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Frequently asked questions
Your bank can place a stop payment on a single upcoming debit and may be able to stop a recurring one, and it may charge a fee to do so. But a stop payment does not cancel your agreement with the biller or the money you owe them. To end the debits properly you have to cancel the pre-authorized debit agreement in writing with the biller as well.
You usually have 90 calendar days from the date the funds came out of your account to report the problem to your financial institution and ask for your money back. You sign a declaration confirming the reason. After 90 days your financial institution does not have to reimburse you, so act quickly once you spot it.
No. Cancelling a pre-authorized debit only tells the biller you want to change your payment method. It does not cancel your contract or the amount you owe. You still have to make arrangements to pay any amount owing, or you may face late fees, interest, or the account going to collections. Handle the contract with the company as a separate step.
If your agreement is for a variable amount, the biller must give you written notice of the amount at least 10 days before they withdraw it, unless you agreed to waive or shorten that period. A debit for the wrong amount is one of the grounds for the 90-day reimbursement claim through your financial institution.
A pre-authorized debit gives the biller permission to pull money from your account. An automatic payment is one you set up yourself, pushing money to the biller, and you can change or cancel it at any time through your own online banking. Automatic payments are easier to stop because you control them directly.
Keep the copy of your written cancellation, because that is your proof the agreement was cancelled. A debit taken after you cancelled is a valid ground to reclaim the money through your financial institution within 90 calendar days. If the bank resists, file a complaint through its complaint-handling procedure, and escalate to the Ombudsman for Banking Services and Investments if needed.
The pre-authorized debit framework is set by Payments Canada Rule H1, which applies across the national payments system, and FCAC oversees federally regulated banks. Most credit unions are provincially regulated. The pre-authorized debit rules and the 90-day reimbursement right generally still apply, but ask your credit union directly about its process and any stop payment fee.
Related guides
- NSF fees in Canada are capped at $10: the 2026 rules
- A bank refused to open your account: your rights and the complaint path
- Setting up direct deposit in Canada
- How to avoid overdraft fees in Canada
- Low-cost and no-cost bank accounts in Canada: the $4 rule
- How long a bank can hold a cheque in Canada
- What a void cheque is and how to get one
Disclosure: Some links on this page are referral links, and Bremo may earn a commission if you open an account, at no cost to you. This does not change what we recommend. The rules, figures and timeframes on this page were verified on 21 July 2026 against the Financial Consumer Agency of Canada page "Pre-authorized debits (PAD)" (last updated 12 March 2026) and the Payments Canada consumer guidance and Rule H1 on pre-authorized debits. These rules apply to federally regulated financial institutions and the national payments system. Provincially regulated credit unions and caisses populaires follow their provincial regulator's rules; the pre-authorized debit framework and the 90-day reimbursement right generally still apply, but confirm the process with your own institution. This page is educational general information, not legal or financial advice. Confirm current terms with your own institution and the biller before acting.