Large holiday refund returned to credit card

paulypost

We recently had the disappointment of having a US holiday cancelled at the last minute (the river boat was in dry dock for longer than planned). The (large) refund was promptly processed at a point my card was £2k negative. This was not due to be re-paid until a month later as usual. The bank refused to transfer the whole refund to my current account and leave the card in the red. In other words they made me pay my subsequent month's statement out of the refund. I was furious and complained. I was told 'computer says No'.
After making a formal complaint I was given a £75 good will payment. 

BTW the holiday firm said that money laundering rules prohibited a credit to my current account.
All comments welcome.

Brie

Normally any credit going from your card to your account would count as a money transfer.  I had a similar thing with a much smaller refund to a card when I was double charged by a store.  But because the MT fee was tiddly the customer service person processed it and refunded the fee so it worked out to zero.  

On the plus side for you at least you now have one less payment to make next month when you normally would have your card DD leave your account.

prettyandfluffy

I'm assuming that the refund was paid to the credit card you used to pay for the holiday, in which case it is correct that the refund should be made to the original payment method.  You then asked for a money transfer from your card which was declined.  There are two separate transactions there and the credit card company is within its rights to refuse your request.

born_again

Given the payment was made from the credit card, why would not want the refund to go towards paying the bill?

Not paying towards the bill is going to lead to interest.
So while they gave you £75 (go away money), they were right to take the amount from the debt, as it was part of the debt.

Retailers should only ever pay back to where the payment was from.

p00hsticks

I'm not sure about 'money laundering rules', but it will have been in the T&Cs of the credit card companies that both the merchant and you signed up to that all refunds are sent back to the same card as that from which the original payment was taken.   

400ixl

Brie said:

Normally any credit going from your card to your account would count as a money transfer.  I had a similar thing with a much smaller refund to a card when I was double charged by a store.  But because the MT fee was tiddly the customer service person processed it and refunded the fee so it worked out to zero.  

Never seen it classed as a money transfer or had it treated as such. Just asked for the money to be put back into may associated account and it has been no issue.

As for using it to pay down the existing balance first then that is typically what they do as I understand it. Certainly been my experience, but never caused any issues.

It is also the case wherever possible they will use the same method of payment to make the refund. Only if that method is no longer available do they usually allow other ways.

I can't see anything unusual in what they have done. Appreciate that it may cause some other issues, especially if you have used a card which is not paid off in full each month and not getting all of the money back was going to cause hardship.

Nasqueron

I'd assume money laundering was so that they could pay for something expensive on the card then get the cash back into a current account so they could take the cash and legitimise the dirty money

molerat

This is a perfectly normal way of treating refunds, only anything over the card outstanding balance will be refunded and will be found in the card T&Cs.   You did well getting the go away money.