Warning to all debit card users

[Frigia]

Hosed at the gas pump -- by your debit card
You may have topped off with just $20 worth of unleaded, but the debit-card transaction could freeze as much as $75 in your account, sometimes for days.

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If you ever use your debit card to pay at the pump, watch out: Did you know that every time you top off the tank, a chunk of your checking account can be blocked -- sometimes for days, with the potential to cause you all sorts of financial headaches and bounced checks?

That's what happened to Jessica Hathaway, a state employee from Allentown, Pa. Earlier this year Hathaway stopped during her commute to fill up her car at Rauch's Mini Mart. She bought $22.29 worth of gas using her debit card.

The next day Hathaway balanced her checkbook using her bank's telephone service -- and something didn't add up. The bank said that she'd made two purchases the previous morning: one for the $22.29 and one for $75.

Trouble is, she'd only bought the gas.

Finally Hathaway called the service station, and an attendant explained to her what few people know.

How your money gets frozen
If you use your debit card at a pump that does not require a PIN, your bank regularly will block out an amount -- often $50 or $75 -- on your card.

That amount doesn't "un-block" as you drive away. Instead, the hold remains up to 72 hours, until the station does a "batch" transaction that lets the bank know the actual amount, according to the U.S. Public Interest Research Group.

While the length of the hold is up to your bank, the amount of the hold is up to your gasoline retailer.

Each big oil company has a different policy: Shell says it preauthorizes just $1 for gas purchases, for example. Chevron says it has a $1 hold that ensures a card is active. British Petroleum preauthorizes $75 when customers use debit or credit cards, said spokeswoman Sarah Howell. The same policy applies at its Amoco and Arco stations, Howell said. Hess asks for $75 as well.

The reasoning behind this policy is that oil companies don't know how much gas you're about to pump -- only PIN-based debit transactions are processed immediately -- and so they earmark a certain amount of your money. "We want to make sure that we're protected, that we get payment for the gasoline," says BP's Howell.

This general idea isn't new. Credit-card companies have done it for a long time. (Think of when you rent a hotel room or a car, and the attendant runs your card upon your arrival to ensure you can pay for it.) It's less of an issue with credit-card owners, however, because you're usually told that it's happening and you're probably not flirting with your credit limits.

If a company puts a chunk of dough in your checking account off-limits without your knowledge, however, it can cause real migraines.

Consumer advocates say beware
Banks give conflicting accounts about what this means to you, the consumer.

Bank of America says that users of its debit cards won't experience bounced checks if debit-card blocks disappear on the same day as they're put in place. A spokeswoman for Wells Fargo agreed.

But the Wells Fargo spokeswoman, Linadria Porter, conceded things can get a little stickier if the block sticks for more than a day. "There is the possibility that you could bounce a check," she says. If a customer calls and points out what happened, "most of the time we will give them back those fees," says Porter -- but not always, she adds.

Consumer advocates say when in doubt, fear the worst.

[Curulan]

Old news, and standard policies for some banks. If this is something that happens to you often, it's most likely because your bank has policies that upset the business you are dealing with. It may be time to change banks.

[Sporon]

Its news to me ... Youd think they would only take wut you pay for ... sorta seems like a scam to me ... the gas companies take out extra and the banks profit off overdraft fee's ... sorta like those ATM's that charge you 3 to 4 bucks to use them ... and sometimes for just printouts !

[Twist Rolarian]

One thing I know for fact, if I use my Wells Fargo debit card at the gas station, I can check my online account a few minutes later and I see only the exact charge. Therefore, I can say that my bank doesn't do this at all.

[Tarathilien]

Just another scam corporate businesses are pulling. I wish sometimes I was filthy with greed like them and could make millions in just a few weeks. But then I'd have sold my soul to the devil...

[Curulan]

No, it's not really a "scam". Like I said before, it's standard business practice. Basically, what they are doing is making sure they are able to get their money and not have the bank later on say "sorry, the money isn't in this person's account", since a gas station cannot actually settle the charge until after the gasoline has been dispssned. The larger amount is an authorization-only (which still shows up in transaction history) and is later released after the real charge is made.

Auth-only transactions have to be released by the card-issuing bank, not the business that makes it.

[Tarathilien]

Well, I know what you're saying there, Curu - I'm used to the charges some companies put down, but $75?!? I don't think anyone in the world buys gas that costs them $75...unless you drive a semi-truck and run it on gasoline.

Why couldn't they take it down to, say, $40? I mean, I only spend about $30 max filling up my car...corporate retards (I substitute the word b*sta*d for the word retard).

[Agustus]

actually if you look at gas prices in some of the places you might see why they do this. Here in cali gas is at around $3.26 and up so 40 dollars is around half a tank of gas remember some crazy people in cali have Gas guzzlers(heh close to my aim sn :-p) like hummers which take up to 100 dollars to fill. so its pretty understandable

[bow4lyf]

Lol, talking about gas, the Jaguars are the funniest. Every time you see sum1 come back with a shirt full of gasoline you'd know its a jaguar because they have very crappy indeed stoppers for the gas, so if ur over the limit for the tank for just like 1 second, the gas in the tank would kick back and spill almost 1/5 of its content onto the target... *you*.

[Tarathilien]

Dang, that really sucks. My cousin from Michigan never had a problem with his Jag. I drove it for a week and never had that problem - maybe it's certain models?