£1,800 short on available balance due to company trying and failing to take payments

pinkteapot

My mum booked a holiday and gave debit card details for a £300 deposit.

The holiday company attempted to take payment, but kept getting error messages. They succeeded on the seventh attempt. (This wasn't while mum was on the phone - their accounts team did it later in the day).

BUT, all attempts have led to the money being 'held' (not sure of the correct technical term) on my mum's current account, so her available balance is £1,800 less than it should be (six times attempts at £300). The bank say the money won't be released for five working days!! :eek:

Just to clarify - the £300 has only actually been taken once.

The holiday company blame the bank ("the payment kept failing"). The bank blame the holiday company ("why did they try that many times? Usually they'd try a couple of times then phone").

The bank have said there is no way to release the hold on the funds any earlier. Is this true? £1,800 is a lot of money to lose access to in a current account for a week. Seems like a bit of a flawed system! Should she be complaining to the bank or the holiday company about the inconvenience?

agrinnall

It probably is true, I've never seen anyone say that it's possible to manually release a hold, and in my time working in the general area of authorisations I never came across a way to do it.

Unless there was an error at the bank the blame does lie mainly with the holiday company, it's quite odd to try so many times without attempting to find out what's wrong. I'm not sure that a complaint to either will get you very far as neither has actually done anything wrong and no extra money has been taken, it's just unavailable for a few days. I'm assuming your mum still has enough money to see her through until the holds drop off?

PS I'd probably have paid the deposit with a credit card, that way you get the S75 cover and it's not your money that is being accessed.

Futuristic

Clear problem is your holiday company trying to charge so many times as if they're desperate for new orders, one or two attempts then asking you to contact the bank to check would have sufficed. They would have seen the decline message on the first try.

I'm surprised after the 3rd or 4th time your bank didn't completely block the company off from even trying to protect you from potential fraud.

Each bank/card provider probably has different terms set on authorisations and in some cases they'll show the authorisation as a "charge" even if it isn't to reserve the funds. As said all you can do is wait.

jimjames

It does seem to be a flaw in the system based on the number of posts here with similar things. I've never used a debit card so not experienced this but I wouldn't expect a declined payment to affect the available balance.
As above it seems far better to use a credit card for such large purchases to avoid the potential issues.

pinkteapot

Thanks, all. Agree entirely re S75 but mum refuses to have a credit card (grew up in the age of debt=evil, despite my repeated explanations about cashback, paying off in full each month and S75!).

Fortunately she does have funds to cover the five days but a lot of people wouldn't when we're talking about that sort of amount. The customer services person in the holiday company was pretty dismissive and referred her to her bank.

I said she should complain to the holiday company, primarily so that they re-train whoever in accounts thinks it's OK to make that many attempts on an account! Not out to get anything as there's been no financial loss.

I knew the issue she was talking about as I remembered an item on Watchdog about Asda online shopping, whereby they'd 'double charge' on your available balance by reserving the estimated funds when you placed an order, then charging the actual amount once the shopping had been picked. There were stories of people who'd had direct debits bounce as a result. If I remember rightly, Asda then changed their payment system so it works differently somehow and doesn't do the first hold on the funds.

agrinnall

jimjames wrote: »

It does seem to be a flaw in the system based on the number of posts here with similar things. I've never used a debit card so not experienced this but I wouldn't expect a declined payment to affect the available balance.
As above it seems far better to use a credit card for such large purchases to avoid the potential issues.

Never used a debit card! Amazing!

This isn't a declined transaction as such, a decline wouldn't put a hold on funds as the system would know that they would never be required. This is more like a failed communication, where the bank has been asked to hold the funds but the request has never been completed. The more I think about this the more likely it is that the holiday company is at fault.

agrinnall

pinkteapot wrote: »

I knew the issue she was talking about as I remembered an item on Watchdog about Asda online shopping, whereby they'd 'double charge' on your available balance by reserving the estimated funds when you placed an order, then charging the actual amount once the shopping had been picked. There were stories of people who'd had direct debits bounce as a result. If I remember rightly, Asda then changed their payment system so it works differently somehow and doesn't do the first hold on the funds.

That's a bit different though, that sounds like a flaw in ASDA's payments system. If the money is successfully taken then the hold should always be removed as part of the transaction, if ASDA weren't doing that it was an error on their part. In this case because there were multiple unsuccessful transaction they each created a hold which wasn't removed, but I'd be reasonably confident that the hold for the final, successful transaction, was removed.

jimjames

agrinnall wrote: »

Never used a debit card! Amazing!

This isn't a declined transaction as such, a decline wouldn't put a hold on funds as the system would know that they would never be required. This is more like a failed communication, where the bank has been asked to hold the funds but the request has never been completed. The more I think about this the more likely it is that the holiday company is at fault.

I can't personally see the point in using a debit card for me when I can use a credit card instead and get paid 1% for my spending as well as not needing to pay it off for between 1-2 months depending on dates. The more horror stories I read the more that decision to use a credit card seems a good idea. In fact it's not strictly true, I do use a debit card in cash machines to get cash but that's never put a hold on huge chunks of money.

agrinnall

I'm sort of with you jim, I'm much more likely to use a cashback credit card, but I do occasionally use a debit card for purchases where there's a relatively high fee for using a credit card or where I'm buying an item that's above my credit limit, usually cars (I once did a £30K purchase, and I'll be doing a £10K one soon).

ATM use can result in money being earmarked, not released and no cash dispensed, but usually only if there's been a comms failure on the network. I'd say if you use a Link member ATM there's considerably less chance of an unreleased hold than when using a debit card to make a purchase.

boo_star

agrinnall wrote: »

It probably is true, I've never seen anyone say that it's possible to manually release a hold, and in my time working in the general area of authorisations I never came across a way to do it.

It can be done, I've seen it done whilst working for a bank. It was done only after a pity plea. Someone needing to pay for petrol and having used their card, it was declined twice. There was no reason for the first decline but there was an authorisation our end showing. The person I was sitting next to agreed to "delete" the auth, so their available balance went back to normal and the transaction was then retried and completed. They were warned that it (the deleted auth) could still debit their account and the bank would not be responsible for the fees.

It is certainly possible but I'm not sure Customer Services has that facility and even then, it's risky, so most will say "It can't be done."

TheBanker

boo_star wrote: »

It is certainly possible but I'm not sure Customer Services has that facility and even then, it's risky, so most will say "It can't be done."

You're right it can be done but most bank staff won't have the authority, or even the knowledge of who can authorise it. In a previous job I could remove authorisations but the bank's policy was only to do this if it was supported by a fax from the retailer confirming the authorisation was an error and would not be claimed.

If it was an 'emergency' e.g. a customer at a petrol station it was a lot easier to mark a temporary overdraft then keep an eye on the account over the next few days. The customer wouldn't be charged for this as the charges are based on the ledger balance so the authorisations wouldn't be taken into account.