The Terrible, Horrible, No Good, Very Bad Hold Policies
If you carefully monitor your bank account or credit-card bill online, you may be spotting some surprising and disturbing fees--especially after buying gas. A colleague recently complained about an extra $1 charge she spotted the day after she filled her tank. The charge disappeared the next day.
She was actually lucky. As gasoline tops $3 a gallon, there are reports that consumers are finding $50 to $80 holds on their bank accounts or credit cards after they buy gas, at least until the actual transaction is processed. For some consumers, those holds could result bounced checks or maxed credit limits.
The problem must be pretty prevalent, enough to warrant a "Don't Blame Me" sign at the pump when I filled up my tank this weekend. (That's not really what the sign said, but it might as well have. The sign said the gasoline station wasn't the one putting holds on bank accounts and credit cards, it was the banks. So take any complaints to the bank or credit-card company.)
What's going on? Visa spokesman Jason Alderman said the $1 temporary fee is "standard and valid," a way to make sure the credit-card or debit-card is active and legitimate before a transaction is started where the final price is uncertain.
But, he acknowledged, some merchants charge considerably more to make sure they are protected if the card is fraudulent, a practice that Visa discourages.
After Hurricane Katrina, Visa learned of stations placing $80 holds on some cards, Alderman said. The practice faded as the gasoline prices eased but have recently begun to reappear, he said. Alderman said Visa discourages the large-dollar holds and has launched a campaign telling merchants that such holds are unnecessary because they are already protected, up to $50, if the cards end up being fraudulent. (And Alderman said that despite the signs at my gas station, it's typically the merchants, not the banks, that put the hold on the cards.)
Restaurants have even greater protection -- the amount of the meal plus 20 percent (to cover the tip), Alderman said. So they, too, don't need to put holds on credit and debit cards.
Clearly not everyone is getting the message. Just ask San Antonio journalist Jena Heath about her recent tab at the Speakeasy bar in Austin, Texas. Her bar bill was $14; with tip it totaled $17. She paid with her Visa debit card. When she checked her account online the next day, she spotted a $50 debit. She called the Speakeasy but got only a recording. After a long list of upcoming events, the recording briefly stated that there was an automatic $50 fee on all debit or credit-card transactions. That fee would drop off in 5 business days, the recording said.
"That's not good," said Alderman, who noted Visa policies allow only a three-business-day hold. Speakeasy did not return my calls, but as luck would have it, Alderman, who is based in California, was already headed to Austin this week. While there, he stopped at Speakeasy and talked to a waitress, who said the bar's standard policy was to open a customer's tab by swiping his/her card and automatically debiting $50 to the account. The correct amount would be posted a few days later and the $50 hold dropped. Alderman said he told the waitress that wasn't standard Visa policy and said he hoped the bar would change its practice.
Meanwhile, he advised, consumers who spot a hold like Heath's should contact their bank to correct it. "In general, talking to your bank is the right thing to do. They're your advocates in this process and that's their job."
I certainly hope so, but I don't hold out much hope, especially since MasterCard has no policy limiting the dollar amounts of holds. "MasterCard leaves that decision/policy up to its issuers," said spokeswoman April White in an e-mail.
Please email us to report offensive comments.
Posted by: Krishna | May 5, 2006 8:36 AM
Posted by: gnubk | May 5, 2006 8:57 AM
Posted by: Tim | May 5, 2006 9:11 AM
Posted by: Lester Burnham | May 5, 2006 9:31 AM
Posted by: Carolyn | May 5, 2006 9:46 AM
Posted by: AKA | May 5, 2006 9:50 AM
Posted by: AD | May 5, 2006 10:17 AM
Posted by: Gene | May 5, 2006 10:41 AM
Posted by: K | May 5, 2006 10:55 AM
Posted by: not a troll | May 5, 2006 11:09 AM
Posted by: ProfessorB | May 5, 2006 11:50 AM
Posted by: Anonymous | May 5, 2006 12:33 PM
Posted by: Jason M | May 5, 2006 12:39 PM
Posted by: RoseG | May 5, 2006 12:58 PM
Posted by: CS | May 5, 2006 1:04 PM
Posted by: lilia | May 5, 2006 1:34 PM
Posted by: Jeff Lenard | May 5, 2006 3:08 PM
Posted by: JK | May 5, 2006 4:01 PM
Posted by: NYC | May 5, 2006 4:51 PM
Posted by: Clueless | May 5, 2006 5:58 PM
Posted by: Diana | May 7, 2006 5:57 PM
Posted by: bigolpoofter | May 8, 2006 1:39 PM
Posted by: Butler | May 17, 2006 12:41 PM
Posted by: tby2000 | May 26, 2006 4:40 PM
Posted by: kristin | September 4, 2006 9:02 AM
Posted by: hate holds | September 6, 2006 11:18 AM
Posted by: Jennifer | September 12, 2006 9:10 PM
Posted by: Evan | September 19, 2006 4:55 PM
The comments to this entry are closed.