Reader WW is upset because a gas station froze $100 on a debit card transaction for $12 worth of gas. This caused his rent check to bounce. Now he’s got overdraft fees and he’s wondering why gas stations are doing this.
I’m trying to find out a little more information concerning an issue I ran in to today with an oil company. Here’s basically what happened…
I went to the BP gas station located on Barnett Shoals Rd on the East Side, to fill up my motorcycle a couple of days ago. I pulled up to the pump and swiped my debit card in to the card reader. It asked if it was a debit card, I clicked yes. It then prompted me to type my pin number in, etc. So, I did. I filled up the tank, a whopping 12 dollars. I went on my happy little way. I checked my bank account today and I saw an overdraft fee on my rent check, and my rent check had not gone through. Thing is, there was still money in my account. I called the bank to get to the bottom of it. They looked and saw where the BP station had put a $100.00 hold on my account. Apparently, these gas stations are holding 75-100.00 on debit transactions. They don’t list this anywhere in the store as a policy either, so that you have the option to opt out. The bank basically said that this is something that gas stations are starting to do. I was irate! How are they allowed to access my account and hold anything beyond the price I purchased for. That is stealing. Sort of like someone coming into your yard and taking your lawn mower without asking, but intended to give it back later. They took money out of my account that wasn’t theirs and without my permission! So, basically I now have about $100.00 in overdraft fees, both from my bank and the rental company. Now, typically this wouldn’t be too much of a financial issue, as I usually have plenty of money to cover things. Unfortunately, this month money’s a little tight, with extra things popping up.
So, after speaking to the bank, I called the oil company that was listed on the draft in my account. Acree Oil Co. I let them know that I was very unhappy about the situation and that I would no longer support the station where this happened, or any other station that takes money out of my account like that. The guy there checked with his people and they said that they have no control over it. It is the credit card company that does this. I said that I didn’t use a credit card, and that my bank had just said that the oil company was responsible. He said that wasn’t so. I also asked him why there wasn’t a sign in the store letting people know about this policy. He said they didn’t need to post a sign because they weren’t the one taking it out, the bank was responsible for doing that. I then called the bank back to see if what he had just said was a lie or not. They said it was, and that they (the bank) have no control over it. I let them know that they do have a responsibility to protect my money, and that they should figure out how to prevent this. They were doubtful that they would be able to control this. They also mentioned that a lot of their customers have experienced this and are also irate. They mentioned some recent story in the news about it. They said that if they could do something about it, they would have already done it, because they have so many customers who are upset. Unfortunately, I had no knowledge of this even being an issue. Now I do and I want to make sure that as few people as possible have to go through it as well. The bank lady was nice. She mentioned a story about a mother recently having the same issue on a weekend when the bank was closed. She had no money in her account the entire weekend and could not buy food or diapers for her children. I think that this is wrong and should not be allowed. Rather than accepting it, I’m going to try to find a station that doesn’t do this. So sorry for the long winded email, but it took me by surprise, and I would hate to see someone experience this. Also, does anyone have any knowledge of this kind of thing? Can they legally do this?
Well, you may not like it (and we don’t blame you) but gas stations have been doing this for some time. The Charlotte Observer explains:
When a consumer swipes a card at a gas pump, most gas stations freeze $1 as a confirmation that a valid checking account exists. That hold usually lasts for a few hours, but can stretch for a couple of days. The station later debits the actual amount of the gas purchased from the account.
As gas prices rise, however, the stations are increasing the amount of money they freeze in order to lessen the risk that they’ll be ripped off.
The hold policies can cause financial headaches for consumers in several ways, said Nathan Tothrow, director of marketing for Charlotte Metro Credit Union:
A debit-card transaction might be rejected even though drivers have enough money in their accounts for the gas they want to purchase. “They have enough money for the gas, but not for the hold,” he said.
The holds can tie up cash that can’t be used for at least a few hours. Unsuspecting consumers might have other transactions declined because the holds are in place.
And there’s a danger that the holds can stay on for longer than a few hours, causing other transactions to cause an account to be overdrawn, triggering fees.
Tothrow said the credit union has received complaints about excessive holds. The bank investigated and found several gas stations were freezing $75 and $90. Most still froze only $1, he said.
“For a lot of folks, a $90 unexpected hold can cause a problem,” he said. “I really don’t like that they are doing it to our members.”
What can you do about it? Not much. The NC Attorney General’s office says to “use the debit card with a gas station attendant and enter your PIN number because there are no holds involved and the account is charged immediately for the exact amount.” Of course, some banks still charge a fee for using PINs instead of signatures, so keep that in mind.
The bottom line? If you’re in danger of a hold like this causing you to bounce your rent check– be safe and use cash.