The latest method to CRUSH the poor, can someone lend insight

[Phoebe Loosinhouse]

Please explain this scenario. Someone I know used a debit card to get gas. She is very tightly budgeted. She knew she had $100 in her account until payday, but with very close budgeting, could do it. She went to a gas station ( a large chain in our area) and put in $10.00 worth of gas on her DEBIT CARD. (Haven't we all been told that a debit card is just like cash and comes right out of your account immediately, and that it works just like a credit card?) She did a few other things and spent a little more money. When she went to pay her last bill, it was DENIED, although she was sure the money was in the account.

The next day she found out the gas station had placed a $50.00 hold on her account for the $10.00 of gas she had pumped. She went to the station , where inside by the register (she had not been inside the store the previous day, because she used "pay at the pump" like we all do)there was a sign clearly stating that a $50.00 hold would be placed on all purchases with a debit card. No one inside the store could explain why this was done, just that it was "store policy". They issued some kind of credit thingy on their terminal and then they told her that it could be up to TWO WEEKS before her bank would credit the money back in!!!!

Now my questions:
Why isn't the correct amount on the debit just sucked out of the account - why is there is extra amount on hold by the gas station?
How is it possible that it could take that long for a bank to get the held money credited back?
Have any of you experienced anything like what I am describing?

[2Design]

1. many places are doing this now - gas and other mini market services

even hotels are doing it now - they place a hold larger than the purchase price on hold on your card

[Phoebe Loosinhouse]

2. But why? I use a debit card all the time for groceries and lots

of things, I have never noticed this in those instances. Why is it necessary for specific places to take more than what was purchased? This is like an interest free loan both to the gas station and to the bank that doesn't credit the money back promptly.

[2Design]

10. they are doing it on credit cards not just debit cards

I don't use debit cards
why are they doing? don't know
assume it is because they can

[datasuspect]

85. point of purchase

groceries, milk, stuff like that is different than hotel rooms or rental cars. you could conceivable stay longer in a hotel or rental car than originally agreed. they make an authorization larger than the amount of your intended purchase to offset any potential cost overruns.

you do get that money released back to you after the bill is settled.

[dsc]

3. I think it depends on the bank and the station involved

I have never had this happen to me that I know of and I would know given a tight budget.

[Samurai_Writer]

4. I've started paying cash for everything

Gas, groceries, anything that isn't a bill that must be paid with a check or online. I get out xx amount on payday, and that must get me by for the next two weeks. yes, it's a hassle to pre-pay for gas when you are using cash, but I'll be damned if I'm going to give a gas station or anyone else my money to use for free for 2 weeks because of some stupid 'hold' on debit cards.

[yorgatron]

8. K&R

that is just lame.
i would be :grr::mad:

[pitohui]

35. i do the same

but my gas vendor knows me and turns on the machine so i can pump first and then pay, even when using cash

[WestSeattle2]

5. For what its worth......

http://www.ssem.com/investigations/debit_card_holds/debit_card_holds.html

http://www.mdislander.com/archive/2006/020906/mdi_edit1_020906.html

[Kutjara]

6. It's a very widespread practice.

The card companies make all kinds of ridiculous claims about why they chew up big swathes of your credit when they have no business doing so. One I've heard is that the store terminal make no distinction between Credit and Debit cards, so they apply the 'credit buffer' to both kinds of transactions.

The real reason is because all that extra cash earns the card companies interest while it's sitting in their accounts. Like banks that take days to credit checks that could be processed in seconds, the 'float' nets them a hell of a lot of money. Whenever legislators here or abroad start making dark noises about eliminating these hidden moneymaking practices, the banks and CC companies start frothing at the mouth and threatening to increase banking charges and CC fees.

It is, in short, a scam.

[Occulus]

69. That store terminal distinction thing has GOT to be completely untrue

I always- always- get asked whether it's "credit or debit" each and every time I use my debit card. My debit card is a debit card only, too, and doesn't support credit purchases.

This is a scam.

[truedelphi]

72. I think that some states have already outlawed this

The practices employed by banks are an abomination

One reason why I wold never vote for Ms. Clinton: she helped approve this legitimizing of
banking's Mafioso behaviors...

If the banks in the state of Oregon could process a bounced check for $ 3 in the early nineties, why are banks everywhere now charging over $ 15 (and some banks charge over $ 28)

Are we less efficient now? What?

[EstimatedProphet]

7. Happens all the time

Why? Likely (this is supposition, but I think it's valid) they make money off of the interest. They dock your account for 2 weeks, hold the money for interest, then put it back in minus the interest.

[Fridays Child]

9. What a scam. This should be straight up illegal.

I'm not aware that this has happened to me but I'm bookmarking this thread just in case.

[WestSeattle2]

11. The money never leaves your account......

you just don't have access to it. The merchant is not earning interest off of your money. All they are doing is "reserving" that cash, in the case of a debit transaction, or reserving a specified amount of credit, if it's a cc transaction.

It's extremely frustrating no doubt, but no one is taking your money. That money continues to sit in YOUR account, earning interest for YOU.

[Samurai_Writer]

12. Not true in some cases

I have had to rent cars, for example, with a debit card. They charge a deposit of $350, over and above the rental fees, and it DOES come out of your account. They then reimburse your account back when you bring back the car.

[WestSeattle2]

15. That is not a "hold", that's an actual charge....

a "hold" is just that, they are placing a hold on your cash or credit. If money changes hands, that's an actual transaction. When you rented the car, you agreed to that....in the fine print. I know what you're talking about, it's happened to me renting cars also.

[notadmblnd]

44. why do they need to do it for more that the price of the purchase?

if I buy 15 dollars in gas, they they have their hands lock around 15 dollars in my account, why do they need to have a hold on more?

[WestSeattle2]

63. Because when you buy fuel, you and the dealer have

no idea how much fuel you're going to pump if you intend to fill the tank up. Could be 8 gallons or or it could be 12 gallons.

So when you swipe your debit card, the dealers automatically send an approval request for $50, $75, or even $100 now that fuel is over $3 per gallon, to your debit card issuer. If approved, then the dealer has placed a hold on that amount of money in your account.

When his account is credited with funds for your actual purchase, then he releases the amount being held, over and above your actual purchase. Your money is not in his account during this process, it stays in your account, but you do not have access to it.

Put yourself in the dealers shoes. Say they set the automatic approval amount to $20. Almost all accounts would be approved. Customer A then pumps $50 worth of fuel and drives off. 24 or 48 hours later, the dealer is informed by his bank that Customer A's bank account only had $25 in it. So, yes, the $20 approval request was granted because the account had $25 in it, but the dealer will have to eat the $25 loss.

If I were a fuel dealer in an urban neighborhood, I would probably set the approval request to $50, since most of my customers would be filling up cars and small trucks. If I owned a station in a suburban neighborhood frequented by larger cars, trucks, and motor homes, you can bet I'd set the approval request to $100. And no, I'm not about "crushing poor people", I'm about trying to stay in business.

To be honest, this practice is at least 20 years old. If I were scraping bottom financially, I sure the heck would not be using a debit card for fuel. Paying cash causes much less stress for those lacking a financial cushion.

People who claim that a hold has never been placed on their account, obviously have a financial cushion in their account, so they just don't notice the holds being placed and removed. Holds happen to EVERYONE using credit or debit cards. This is not about "crushing poor people", it's about ensuring that businesses don't end up eating losses.

Is this being abused by some businesses? Sure sounds like it to me, and that needs to be addressed by state legislatures. There should be strict time limits for holds, I would suggest 48 hours MAX. I don't see a need for 72 hour holds.

[GirlinContempt]

67. So, you guys haven't

figured out yet that there are gas pumps where you preselect your spending amount, pay for it, and then it ONLY lets you pump say, $20?

[knitter4democracy]

81. We use the gas cards.

My kids' school sells them as a fundraiser, and that's almost all we use. It helps with budgeting (I have to go to the office and buy them), and there's no hold or anything messing with my credit.

[Occulus]

70. .

no idea how much fuel you're going to pump if you intend to fill the tank up. Could be 8 gallons or or it could be 12 gallons.

So when you swipe your debit card, the dealers automatically send an approval request for $50, $75, or even $100 now that fuel is over $3 per gallon, to your debit card issuer. If approved, then the dealer has placed a hold on that amount of money in your account.

When his account is credited with funds for your actual purchase, then he releases the amount being held, over and above your actual purchase. Your money is not in his account during this process, it stays in your account, but you do not have access to it.

Put yourself in the dealers shoes...

That's just it- I can't put myself in their shoes because their shoes are filled with horseshit. There isn't any reason, technologically speaking, why their little machine can't ask you for your payment method after you pump your gas. If you were to dig a little bit, I'm sure you'd find that the same banks involved in processing their accounts also do the same for grocery stores and even online businesses, making the reasons you stated for such holds not only unnecessary but completely bogus.

Here's an example. When I go to the grocery store, use my debit card, and then go home and check my electronic records online, I find that the money I spent- and only the money I spent- has been deducted from my account. I swipe my card after I get my purchases rung up- and there's no reason, none at all, why gas stations can't do it the same way- and in fact they do do it the same way if you actually go in and use the card rather than use it at the pump (and thusly having to preswipe your card).

The hold on your cash is a scam. Their reasoning is totally bogus- and their own practices prove it.

edited to add: someone downthread mentioned that it's usually done when the PIN isn't entered. Well, okay, but the reasoning is still crap: there's no reason why the pump can't send the exact amount to be debited after pumping is completed. Assigning a block of money from the account isn't necessary when the exact amount is known, and if the pump can tell the bank "this big of a block amount" then it can tell the bank the exact amount.

In other words, this is still a scam.

[Solon]

102. How the hell could that happen?

In my area, if you pre-pay for gas, through gas card, debit, credit, or cash, you CANNOT pump over the amount you paid for. If you just pay at the pump, with a gas, credit, or debit card, the amount increases as you pump, you pump 30 dollars and 20 cents in gas to top off the tank, THAT is what is charged to the card, period. There is absolutely NO reason for the gas company to put a hold on more of your money. No excuses for that. Also, if you don't have the money in the bank, then you have to pay the amount anyways, with penalties.

[kywildcat]

62. They have been doing this for 20 plus years

certainly with credit cards and car rental companies. I worked for a major car rental co. in the 80's. We always authorized a hold on the credit card for more than the rental. Part of the logic (then) was if a customer signs a rental agreement, and decides to return the car late - which happens often with weekend renters- and the customer had racked up a lot of other charges, the company would stand a chance to recover the fees. As well, if you sign a rental agreement, and you keep the car say 30 days instead of the reserved one- (in the 80's) it wasn't car theft, it was conversion since the company willingly handed over the keys-so the company had a hard time recovering cars because they were not technically 'stolen'. The additional money authorized on the credit card was supposed to be a deterrent.
just my 2 cents-flame away

[Phoebe Loosinhouse]

14. yet in one of the links you provided in your previous post

from a law firm no less,

Gasoline stations such as Sunoco, Shell and GetGo have begun placing holds on debit cards to validate customer accounts before starting the pumps. As gas prices are soaring, gasoline companies and some individual gas stations are placing holds as much as $100 or more, which can cause problems with customers' checking accounts, especially if the holds are not released promptly. Contact us if you used your debit card to purchase gasoline and a large hold was placed on your checking account and not removed, causing overdraft and other charges.

If you used your debit card to purchase gasoline and a large hold was placed on your checking account and not removed, causing any overdraft or other charges, please use the form below to contact our law firm.

I also don't think it's quite so benign as your view that the money continues to "sit in your account, earning money for you."

It's the consumer's money and they should have access to it when they need it. Also as in the quote above from your link, these holds can apparently cause real harm if it triggers bounced checks or overdraft charges. And again, who gets hurt the most? - those who can afford it the least. Just another disgusting way that we throw more people into hopelessness everyday.

[WestSeattle2]

18. I'm not saying it's benign....

all I wanted to make clear was that in a "hold" transaction the money is still in your account. You are correct, real harm can be done if debit card users are not fully informed of how the system works.

Debit card issuers need to do a better job of educating their customers as to how the system works.

[On the Road]

78. West Seattle, Is There a Mechanism

for dropping the hold on any amount exceeding the purchase price? Because there sure as hell ought to be.

I completely understand practices for rental cars because the provider has a large financial risk until the car is returned.

I understand the gas station's need to ensure that there are sufficient funds in the account before allowing a debit card to be used. I do NOT understand continuing the hold after the product is purchased.

[cornermouse]

17. Look, if you want to let a mega company freeze your cash

then do it and be happy. Personally I pay cash for most things that aren't bills and if the few things I do pay for ever start freezing my bank account, you can bet your sweet bippy that I'll be shopping somewhere else next time around.

Wal-Mart now does the instant check thing. I stopped shopping there.

My old regular gas station did the cash first thing. I found a station that still did things the old fashioned way and now buy all my regular travel gas there.

And I currently have NO plans to ever go shopping again in Kansas City since they passed an all stations must be paid before pumping law.

I'll be darned if I'll spend my money in any store or station where I'm basically being accused of being a potential thief and treated accordingly without ever having committed a crime.

[proud2BlibKansan]

55. They didn't pass that law in KC

They are still just talking about it. The police dept asked the city to pass the law but it is not a done deal and it doesn't look likely that it will pass.

On the other hand, most of the stations here are prepay anyway. As gas gets more expensive, more and more people pump and drive off.

[EstimatedProphet]

19. Does it? OK

However, like the poster downthread mentions, specific incidences like car rentals happen where they do remove money from your account. In those cases, it's likely that they are using the money for interest.

[Imagevision]

43. Bush has already crushed the poor, he working on the middle class now

[ebayfool]

25. Doesn't make any difference to the card holder, if they have no access

to their funds for 2 weeks it has the same effect as if it was taken out. On a tight budget, that can be a rather fine hair to split!

Most debit cards are 'attached' to checking accounts, not savings accounts, so the consumer isn't likely to be scoring interest while they are waiting for the hold to be lifted. Most checking accounts that DO offer interest tend to be largish minimums required to qualify - those who can get them don't tend to be the people that find themselves unexpectedly w/out grocery funds for the interim.

It's not alarmist for these kinds of threads to come on DU ... that's how I first heard of this practice & learned to be wary of the merchant policies where I live. I'm one of those people that were unaware of this practice (till seeing it discussed on DU) & after checking it out locally found quite a few merchants do it.

I'm also one of those folks that would have been having a major public meltdown if I had this happen w/out being aware of the policy. I'm one of those that would have had to go sell plasma to feed the family if the budget was cut by $50 unexpectedly. Trust me, selling your body fluids sucks. Big time.

[Gormy Cuss]

39. What you wrote is the heart of the matter. It's being caught off guard

that makes this policy so hard to take when you're in the unfortunate position of being in a budget squeeze. It's hard to be a good money manager when your access to your own damn money is constrained by $50 holds all over the place.

And your observation that the banking rules for people with small amounts in their accounts are often quite different is absolutely true. It's not just the stated rules like whether the account pays interest, it's the flexible responses to other restrictions too. The more money you have in the bank, the better the terms are all around.

[pitohui]

36. westseattle is correct

thanks, you saved me some typing

[Occulus]

71. no he's not

and it doesn't matter if the money's still there if you can't use it to feed yourself or keep yourself housed.

And if you're down to your last hundred bucks and it's a week until payday, it can cause problems that last.

This should be illegal.

[proud2BlibKansan]

54. But what if your account goes down and other debits ae not paid?

Are you charged with overdraft fees?

[MysteryToMyself]

95. Do that to a 1000 customers

and you will make some money. I believe it.

[cigsandcoffee]

13. I'm sure it results from an epidemic of initially approved...

...charges that bounce when they go through a few days later, because the "poor" person in question went through the remainder of money in their account without budgeting what they'd spent in the first purchase. It's the kind of fiscal mistake a sloppy college kid would make in droves.

[WestSeattle2]

16. Yes, that can happen.....

you write $500 in checks to pay bills and utility payments, then buy gas the next day. If the gas dealer doesn't release the hold immediately, and those utility payment checks start hitting your account.......

Ouch.

[Phoebe Loosinhouse]

23. And the repercussions from overdrafts and bounced checks can

be life altering. They can ruin your credit rating. They can make it hard or impossible to open another checking account. If you have a poor credit rating:

You may not qualify as a tenant
You may not get hired
You may not qualify for telephone and utility accounts
YOu may not get some kinds of insurance

You could be forced by default to live in a pay-by-the-week motel. You will have to cash your paycheck at one of those paycheck places that also robs the poor.

Pretty stiff punishment because a poor person used their debit card at a gas station and did not have enough of buffer in their account to protect themselves from overdraft charges. And how sympathetic do you think Mr. Drysdale over at Heart of Stone Bank will be? This is what I mean by CRUSHING the poor.

I agree with those posters who call this a scam.

[cigsandcoffee]

30. Scams usually result in people making money.

Who makes out in this case, assuming the difference between the actual charge and the $50 "deposit" is credited when the charge goes through?

Believe me, I despise these banks. Bank of America is pure evil, such as in the way they put the biggest checks through first, hoping to bounce a bunch of little ones behind it - but I don't see who is making money in this case.

[Rose Siding]

56. Interest on loans outstanding can increase dramatically-

if a payment is missed -which could happen if a check bouces because there's a "hold" that the customer isn't aware of. That profits someone.

[cigsandcoffee]

31. But the gas dealer doesn't profit from bounced checks.

They just want to be sure the dough is there. It's a rude method, but I don't see how it's a scam.

[tbyg52]

59. I guarantee you

that *someone* profits from the bounced checks. That money goes *somewhere*. And it's a big fee, so I'm sure someone somewhere *likes* bounced checks.

[ComerPerro]

103. banks profit twice off of bounced checks

[patdem]

20. That is just idiotic...NO..cause if it bounces for $10.00 it will bounce

for $100.00...give me a break!..Why do you hate poor people?

[cigsandcoffee]

24. What are you talking about?

Where did I profess to hate poor people?

[bananas]

21. No, it's a scam

see the other posts - they do it to credit cards, too.
As for debit cards - the money is withdrawn electronically immediately,
it's either there or it's not, there's absolutely no reason for a $50 "hold" above the price of the gas.

[cigsandcoffee]

27. It is not withdrawn immediately in all cases.

When I put gas on my card, it rarely goes through until a couple of days later. Conincidentally, a full tank costs about $50 these days.

There is nobody scummier than credit card people and corporate banks - nobody - but I don't think this is a scam.

[MrPrax]

32. I think so...

debit cards immediately credit the account once processed -- this is entirely an arrangement between vendors.

The 'hold' part I don't get, because the ONLY one that can authorize a HOLD would be your bank and you -- a third party lender doesn't have that power to HOLD your money, unless you've authorized it. This doesn't sound like an standard ATM transaction.

So assuming that when they ring the sale and put the transaction through and receive electronic confirmation and a transaction number...um...where is the rationale for a 'hold' on a debit card?

If it's approved, it's approved? How is the seller at risk if the purchase amount has been approved?

[GirlinContempt]

68. I think you all must have different debit cards

My debit card, if a transaction is approved, can not then be later rejected. It's direct to my bank account, with no credit involvement. If I buy something, the money is removed from my account immediately. Anything that happens in my account a few days later cannot affect a purchase made previously, that money is already gone. If the funds do not exist at that moment in my account, it's rejected. If I later forget I bought $30 in gas and write a cheque, that cheque will bounce or overdraw my account.

[Midlodemocrat]

22. I've never had that happen to me and I use my debit card

all the time for gas, groceries, etc.

As for hotels, they put a hold on your credit card account to cover extras you might purchase, such as room service.

[Jazzgirl]

26. I have heard of this happening and it is just plain wrong.

I don't even understand how it can be legal. They get to put a "hold" on whatever amount they want for up to two weeks which means they're making interest on your money and you lose??!!?? They shouldn't even be able to get away with it, not even on credit cards. If you got the money to cover the purchase thats all that should matter.

JG

[pitohui]

37. they're not making interest on your money

see westseattle's post upthread

[SmokingJacket]

28. Why do they have this power?

Why should a gas station have the power to put a hold on someone's account???

Can I put a hold on someone's bank account if I want to make sure they don't bounce a check to me?

Sounds like a big bowl of wrong.

[pitohui]

38. well probably yes

i know a lot of restaurants where servers expect to be tipped, and it isn't known exactly what the tip will be in advance, put through small "holds" also

it may depend on your business, but it certainly isn't a rare thing perpetrated only by gas stations

hotels used to be the biggest examples, because they would put ridiculously high holds

[datasuspect]

86. the gas station doesn't have this power

the it's the merchant authorization computer system that acts as a clearinghouse for these transactions.

[derby378]

29. It happened to me, too, but the circumstances were different

Used a debit card to buy gas on Friday evening. Checked the balance when I got home. Found that $50 was deducted instead of $10. Called the company. They told me it's a safeguard to ensure payment, and that I should be credited with $40 on Monday morning. I check at 9:30am on Monday. Money's back. Problem solved.

[sandnsea]

47. Never been down to your last $40??

Problem solved my ass when your kids can't eat till Monday. I never got into the debit card habit and now I'm glad I didn't. Cash all the way. Fuck 'em and all their stupid service charges that ding people to death.

[derby378]

50. That's where I'm at, too

And yes, I've been down to the change in my pockets, myself. It's a long road ahead for all of us.

[sandnsea]

51. Your post sounds rather flippant

Money's back Monday 9:30 am, problem solved... sounds like no big whoopdidoo to you. Which I would think you wouldn't say if you'd ever actually been down to the change in your pockets and no food in the house and/or no house at all, but I guess that's just me.

[Phoebe Loosinhouse]

33. More info on this practice

http://articles.moneycentral.msn.com/Banking/BetterBanking/HosedAtTheGasPumpByYourDebitCard.aspx

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.

skip

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.

http://www.georgia.gov/00/article/0,2086,5426814_39039081_43087747,00.html

How can you speed up the hold time and avoid having use of your card denied when you know you have a sufficient bank balance? Use your personal identification number (PIN), rather than a signature-based transaction, with your debit card for greater security and an immediate release on the hold. If you use your PIN and the display reads "Authorizing…" after you swipe your card, the normal money hold is being charged to your account. In the case of a gas purchase, the hold should change to the actual amount after you finish filling your tank. Pay inside for gas purchases if the pump does not have a PIN pad; or consider paying by credit card instead.

Also present your credit card up front for hotel stays or car rentals of more than one day. When you pay your final bill, using a debit card is fine, because the exact amount should then be charged to your account.

It would be a good idea to ask your bank about its policy on the length of debit holds. If a hold lasts longer than a few minutes for a PIN-based transaction or a few days for a signature transaction, ask why. Make it a regular habit to monitor your online bank statements, and call the bank if you notice any problems associated with debit transactions.

So, it appears that if you use a PIN with your card that this will NOT cause a hold. I did not know that. I always thought it was much safer and more secure to use your debit as a credit and avoid PIN numbers. IN fact, my bank actually issued me a new Debit card because they said mine had been compromised by using it at a certain gas station that had an apparent data theft. That was the ONLY time I ever used that card with a PIN for gas, too. And the gasoline company never told me that the card was compromised - only my bank did.

[ananda]

52. Thank you!

I was wondering why my debit cards never got a hold. I always used the pin numbers.

However, I'm going to be more careful with merchants anyway.

This is all good info and much appreciated.

Sue

[pitohui]

34. pretty standard, been doing it for years

it wasn't invented to crush the poor, i doubt anyone realized there would come a day when the poor would have debit/credit cards and this practice goes back to the 80s at least, depending on the merchant -- hotels used to be shameful about this, such as putting $2K holds at a time when $2K was all a person's credit card was likely to be approved for, so the person couldn't even buy food while on vacation unless they had another card or got money wired to them by an understanding relative

i find when money is v. tight it is best to use cash, no mistakes or "holds" possible that way

altho i've prob. caused a few eyeballs to roll up and i show up to pay w. $3 in quarters that i just dug out of the sofa :-)

[Phoebe Loosinhouse]

40. To summarize, if you have money in the bank and don't live paycheck

to paycheck, this is probably no big deal to you. A big yawn.

The person who caused this thread in the first place does live paycheck to paycheck. Finding her funds frozen was a very big deal to her. She is a young woman trying to establish herself and was proud of her checking account and responsibility. Because she was unaware of this practice, she is now right this moment creating late fees and a bad credit rating for the bill she was unable to pay although she did have the funds. Sad. Oh well, it's all her fault. She should have known better and known the rules. She thought that if she used a debit card, that would teach her responsibility and create a paper record for where her money was going. Too bad about this little problem with the frozen funds.

In reality, I don't know who profits from this. I guess a bank would, if they got overdraft and bounced check fees that they normally wouldn't have. I don't know if the companies that put these holds on in the first place profit in any way. I thought that I was fairly informed and I do know about hotels doing this and rental car places, but I didn't know about the gas stations. I check my account all the time online and can pretty much monitor what's going on. But a poorer person may not have a computer, may not have internet access and may just not be privy to all these entrapements and could very easily be "wrongfooted" when to them, they were playing by the rules - paying with the money they knew they had in a mainstream bank account with a debit card.

I think the best advice for someone working with limited funds would be to establish a secured credit card. (Of course, you would need a certain amount to establish the account)Then, they could get the advantages that they thought they had with the debit card.

[elehhhhna]

45. I looked into this a few years ago and back then the gas station "holds"

were ONE DOLLAR -- esentially , enough to make sure you simply had a live account.

[madokie]

41. yep it sucks, the main reason I got a debit card in the first place was

to pay for my gas with, lucky me I read about this charge before it caused me any headaches,shrug:

edited to correct: misspoked

[Imagevision]

42. This was brought to light after Katrina hit last year - money isn't sucked

out immediately, just verified that it's there, gives the 7-11 or whatever to make a deposit for the entire day's transactions, obviously the 7-11 got buned so they put a $50.00 "lean" on your debit card to cover their own ass which has to be illegal, but no-one has contested this yet, so the beat goes on...

[undergroundpanther]

46. Fuck

Fuck this bullshit.

I'll say it again and I don't care who it offends..I hate the rich people fucking us over.Nickle and Dimeing,us all..making every transaction a pain in the ass and potentially costly..making everything a hassle .They assume all poor people are all thieves..Uh Huh..And how Poor was Kenny Boy he was a Thief..and his wife is living in luxury and how many people got robbed by this fucking shit head? And he was protected and he never got a single tooth knocked out from an irate ex employee..who's future was screwed..I wish these rich people had some INSTANT KARMA..for once.... Goddammit. I gotta use cash only now because being stuck with a hold fee out of the blue from one of these scumbags would fuck me over royally..And I have no car so I gotta walk..Fun..Fuck the wealthy pigs.I hope they really suffer someday.Just like they make everyone else suffer and then some.Ass hats.

[sandnsea]

48. Right there with ya' on this one

And I hate the smug-ass people who just shrug it off too, "no problem". They piss me off the most because they're the ones with the money and clout to challenge this shit and they're too fucking selfish to do it. Goes for people who pay charges and fees that aren't theirs and don't challenge hospital bills because "insurance pays" and a whole host of shit that causes major grief for low income folks who are in absolutely no position to fight any of it because we're just a bunch of lying cheaters anyway.

[tbyg52]

60. The only people this will offend

Are the people you are talking about, and they *need* to be offended. Actually, they need to wake up.

[lostinacause]

74. The ones implementing this policy need not wake up.

Unfortunately, because of theft something such as this is necessary. Perhaps the companies should better inform people that they are doing this. However there is a simple solution, if you are living paycheck to paycheck and not having $50 is a big deal then pay with cash. From a societal standpoint people should be more concerned about making it so people don't live paycheck to paycheck rather then making unjustified complaints about how the rich are trying to harm them.

[lostinacause]

73. Did you read the replies. If anything a portion of the poor should be

blamed; the ones who steal gas. They are the ones who necessitate such actions. (The rich generally don't steal gas as the costs of doing so out way the risks. People with wealth who steal generally use more sophisticated methods.) Also note that countries with higher gas prices don’t seem to have this problem to the same extent. Drive-offs are very rare in Canada and likely even rarer in Europe. Just accept that you have to pay cash or deal with these holds.

On a side note it seems far too prevalent that people blame the rich for every problem that occurs. This desire to blame them ultimately clouds judgment and leads to decisions that are detached from rational goals.

[MadHound]

49. So, since this is happening, what to do about it?

It's your money, your decision, your choice. Frankly, I choose to go cash, checks for bills and large purchases. No holds put on, lowered risk of ID theft, minimization of the trail you leave in corporate database. I feel the trade off in convience vs privacy and hassle is a reasonable one:shrug:

[proud2BlibKansan]

57. It is not merely a loss of convenience to be robbed of your money

especially when you are living on a tight income.

This is just despicable, IMO. I ALWAYS use my debit card for gas. It is not only a convenience, but a matter of personal safety. It is not always wise in the neighborhood where I work to go inside a gas station to pay for gas. And many of the people in that neighborhood are poor. How awful to hear of this practice.

What is happening when this country allows practices such as this and even DUers say oh it is only a trade off in convenience vs privacy?

Can you imagine if every time you write a check at a retail outlet, the merchant makes you add $50? How long do you think that merchant would stay in business?

This is just infuriating. I can't believe more people are not just incensed over this.

[MadHound]

98. I agree with you that it is infuriating

And I wasn't trying to trivialize it. However, as we've seen time and again, corporate assholes are going to go as far as their bottom dollar lets them. Therefore it seems that it is time to hit them it the wallet, and the only way to stop that is to stop using the debit card.

Look, I understand your fears about robbery, I've lived in rough areas before where one doesn't go out after dark, and gunfire is in the air. But frankly, you're running a risk of theft bpth ways, either virtually, through your ID being stolen, or personally via a mugging:shrug: I've always found that if you wish to be cautious in such places, don't carry more than twenty bucks. Better to lose that than have your bank account drained before you even know it by some anonymous person who slipped a card reader into the gas pump and has *all* your banking information, thanks to your handy debit card.

Is this an outrage, yes. Should the government do something about this, yes. Are they going to do something about this, no, not in the foreseeable future, no matter who is in office. And it is of no use to take the issue to courts because there has already been relevant prescidence set for these sorts of fees and withholdings. Therefore one is left really with only one choice, continue to feed the problem, or cut the problem off cold. Myself, I choose to cut the problem off cold, and not deal in plastic of any sort. It means that I am a bit less convienced(and not so as I would notice, since I've been going inside to pay for thirty five years now), and I run the risk of getting mugged at said, generally well lighted parking lot on my way in. Keeping control of my money, not risking ID theft, and not leaving a trail of purchases and where I've been far aways the inconvience and risk of attack:shrug: Your mileage may vary.

However if enough people cease using their cards, there is a chance that they will stop such practices. This tactic has worked before, it can work again.

[The Backlash Cometh]

53. It shocks me how we continually allow financial policies that make

it impossible for the poor to get ahead. For example, people who can't afford to open a bank account have to pay a ridiculously high price to cash checks. Interest rates are outrageous for people who rent or buy basic things like furniture.

And yet, AND YET, look at what the rich have: They get into financial institutions which will put them on the gravy train -- like pyramid groups, they sell us the vanilla stock to milk our money, while they make sure their 1%ers get taken care of. The rich also have contacts which will take them on yacht rides three miles off-shore to sign contracts, so they override our tax laws. There's so much more, but why give them ideas?

AND THEY FUCKING WANT TO KNOW WHY OUR GOVERNMENT EXPECTS THEM TO PAY MORE IN TAXES!!!!!

[Name removed]

58. Deleted message

Message removed by moderator. Click here to review the message board rules.

[MissB]

61. I'm not sure if this varies from state to state or store to store.

But I've never had more than a $1 held against a gas station transaction. Doesn't matter which gas station I use in the state of Oregon, it is always $1. Perhaps there is some sort of state legislation in Oregon that prevents the gas stations from holding more than $1 over the total amount.

[shimmergal]

64. Why on earth can't we get a

small group of progressives in each city to put out a brochure, telling which stations and other stores do this and for how much? Researching it should be easy. If the stores themselves won't say, just get input from people who know from personal experience. There's plenty of places such a brochure or fact sheet could be distributed--libraries, for one, and probably those racks at groceries that hold free apt. guides etc. And I'll bet some of the underground newspapers would pick up on it, too.

And while we're at it, somebody needs to do this for banks too--_publish_ the fees they charge for bounced checks, and their policies. If you go in a bank to open an account, they'll give you all kinds of information about interest rates, free checking accounts, etc., but getting this other info. is very difficult. Thjey neveer put it in THEIR brochures. Prospective customers don't want to ask, either, because they're afraid it'll mark them as a bad credit risk.

[astral]

65. There is no excuse for this practice.

When you put gas in the tank the register can see immediately how much gas you put in your car. Why take more than that amount? I also was at a station where you 'pre-pay' and then you can only pump as much gas as you pre-paid for at the pump.

I had no idea of this tactic but there is no justification for it --- and, if people are going to do that to customers, it should be PROMINENTLY POSTED both at the gas pumps and at the register, so nobody will do this without knowing in advance what's going to happen and being able to make an intelligent decision before putting the gas in their car.

[eallen]

66. 1st, it's not a conspiracy to "crush the poor." 2nd, debit cards suck.

Everything is harder on the poor. If you have a modicum of savings, you keep the liquid part in a money market account that pays today around 5% interest. If you're poor, you pay the check store to cash your check, and then figure out a way to keep the cash safe. If you're really poor, your pocket is bare. If you're relatively well off, you own a house. If you have modest means, rent sucks up a large percentage of your income. If you're poor, you sleep under the stars. If you're well-off, you go to recovery. Just like Mel Gibson. If you have more modest means, you go to AA. If you're poor, everyone tells you that you could get off the streets if you just dried up. Being poor sucks. There have been some municipal projects aimed at the poor, mostly to get them out of sight. Most of these differences are just because the poor are not a target market, for the simple reason, that they don't have much purchasing power. What political capital they have comes from liberal politicians, many of whom aren't really thinking much about what would help. The right-wingers, of course, use the poor as a hobgoblin against their base, who would prefer not to think about the poor, except on Sundays, when discussing how to missionize them.

If you're relatively well off, you have a credit card that costs nothing, that you pay off each month, and that pays a cash rebate on every purchase. If your means are more modest, you're either float credit card debt, or you have a debit card, that charges a fee each time you use it. If you're poor, you have to pay cash.

I would never own a debit card for a very simple reason: the money is drawn from the account before I've reviewed the bill. In theory, fraud protection is much the same for credit cards and debit cards. In theory, the rich and poor are equally free to sleep under the bridge. In practice, I have found it is much easier to keep money in my pocket, than to get it back from someone else's pocket, who thinks it is rightfully theirs. With a credit card, the money is in my pocket until I see the bill and write the check. With a debit card, if I think there are $500 of fraudulent charges, I have to work to get that money back. I hate trying to get money back. I'm perfectly comfortable telling someone I don't owe what they think, and that George Bush will be freezing his ass in hell before they get paid. But that's just me.

:hippie:

[SoCalDem]

77. Debit cards (most of them) pay the merchant for goods you RECEIVED

It's to replace cash... More and more of them are less ATM-ish and more like credit cards these days, and people need to read the fine print..

My son overdrafted his account because the debit card allowed him to use it, even though (unbeknownst to him) a check he had deposited from someone had bounced, and his account did not have as much in it as he thought.. He was out of state on business and did not find our until he got home..

It was a costly mistake for him, and it pissed him off greatly, but it taught hom a valuable lesson too..

[ArbustoBuster]

75. I've written software that interfaces with credit card companies.

And I have no idea why they would create a hold that is larger than the amount of the sale. You can create a hold of any arbitrary amount (so if the sale is for $15.12, you can create a hold for exactly $15.12). It sounds to me like the gas station is screwing over its customers for some reason, although I can't imagine what that reason is. The gas station can't collect interest on the held money, since it's not "real" money - if you put a hold on a credit card or debit card, you're only marking that chunk of money as "in use" so that the bank or credit card company knows that it will be spent soon. The money is still in the cardholder's account, and is only marked as held.

All in all, I have no idea why the gas station is doing it, but it's definitely bad for their customers and therefore an improper business practice.

[The Straight Story]

94. Because, they say, they are waiting on the bank

Let me give you an example from my life:

I have 4 credit cards, none with a limit over $300.

I ran one up, 250, and called up the company. Gave them my account info, paid it in full.

A week later I went to use the card and it was declined. I called they company and recording said I did not owe anything. I waited and talked to an operator who told me that it takes two weeks (sometimes more) for it to be processed through the bank. The money in my account was not there, as it showed the bill paid (ie, my account summary showed I made the payment).

I thought it was just one company. I found out over time all four credit cards I have are exactly the same way.

At a gas station they usually don't know how much you will pump, block off a 'reasonable' amount, and then hold it until it has cleared (in some cases).

It all sucks. And I work for the bank whose account I was mentionining. We are electronic, the funds transferred are, but the CC companies hold onto them unless I pay to send it western union (versus check by phone).

[Phoebe Loosinhouse]

76. CRUSH the poor was a bit melodramatic, I admit

even though this practice may in fact crush some poorer person who was just not aware of this issue and then found themselves unable to get at their own limited funds, or worse, found themselves generating bank and overdraft fees that they cannot afford.

It's an education and disclosure issue.

(And, you know what, I remember seeing a credit card amount from a restaurant that we ate out at that seemed higher than I remembered us spending. Someone on this thread mentioned that restaurants run a higher amount and then do a correction. I am going to be a lot more vigilent about this in the future. This is how they CRUSH the middle class!)

[Phoebe Loosinhouse]

79. This response makes me seem mellower about the whole issue

than I really am. I think we now know, yes they put holds on debit accounts and yes it can screw you up, and yes, it can take some time to be corrected and until then you are screwed.

Why would debit card technology be behind credit card technoloy. Why would it take so long for a correct purchase amount to be entered? Why would it take any time at all for the bank records to be corrected? There is still some element I'm not getting here.

[Breeze54]

80. I have a Debit-Check Card.

If she used "credit' then she is actually "writing a check"
and they want to see the check clear. If she used "Debit",
then I think it should have paid immediatly.
I've heard of this before and some places are doing this,
from my understanding. She should check with her bank.
Possibly she had other charges pending on the account and
that purchase didn't go through as fast as she anticipated?
:shrug:

On further googling....

http://www.msnbc.msn.com/id/13905579/

How to avoid getting socked with extra fees
Nothing is as simple as it seems when it comes to debit cards, credit cards

I filled up my car at a local gas station, using the pre-pay only pump.
Without my knowledge or consent, the gas station charged $100.00 on my debit card,
even though my total gas purchase price was $22.47. The gas station tells me it is
“standard” practice to over-ring a prepay sale such as mine,
even to the amount of $100.00.
— Susan M., Minneapolis, Minn.

snip-->

It is common practice for gas stations to put a “hold” of $75 to $100 dollars on debit cards,
in order to make sure they get paid for what you pump.
According to Gerri Detweiler, author of “The Ultimate Credit Handbook,”
the station actually puts the hold on your card first and then charges
your debit card for the actual transaction.
“But the hold isn’t always released immediately,” she explains,
“so this can tie up those funds for as much as 72 hours.”

The money that’s “on hold” is still in your checking account;
you just don’t have access to it, which could result in checks bouncing.
That’s why you need to be careful if you use your debit card at a gas station
or hotel when you have very little money in your checking account.

Yes, hotels also put blocks — much bigger ones — on debit cards.
That’s why I tell people not to use a debit card when checking in,
even if you plan to pay with one when you check out.
Let them take an impression of your credit card at registration.
Any hold will be placed on the credit card, which shouldn’t matter to you
unless you are near your limit. When it comes time to pay the bill,
tell them to put it on your debit card. <--snip

It sucks!

[datasuspect]

82. when they send the debit or credit card

you actually have to read the legal language in the disclosures. at a pay at the pump, they authorize a minimum amount (often $50.00) to cover the potential cost of the fuel purchase.

the merchant uses whatever system they use to process credit card transactions, it has nothing to do with the actual store.

so, in the future, when your friend needs to use the debit card, tell them to go into the store FIRST and make a fuel purchase in the amount of $10. that way they avoid the pump authorization feature.

[Breeze54]

84. "it has nothing to do with the actual store"?

yes it does, not all gas stations and stores are doing it.
At least not the one's I frequent. ARCO seems to make it sop.

[datasuspect]

87. when you use a credit or debit card there is an authorization system

in place that the merchant has no control over.

no one is actually fucking anyone.

it is a simple authorization process and has been that way with rental cars and hotels for many years.

[Breeze54]

88. The vendors put the hold on..thru their bank.

http://www.newszap.com/articles/2006/07/06/fl/lake_okeechobee/aoke01.txt

Debit hold adds to purchases

John Hall, in public relations with the American Bankers Association in Washington, D.C.,
said such a hold can cause an overdraft situation. If a person doesn't know a hold is on
for a larger amount than the purchase and they use their debit card at several other places,
it could result in overdrawing the account.

Mr. Hall said the retailer establishes how much over the amount of purchase the hold
should be and that the retailer works with its own bank to process the transaction.

"Their bank asks if they want to have a hold put on," he said.


"When a vendor puts on a hold, they put the amount and also the time it should be held -
for three days or four days, whatever they decide. They like to say it's the bank doing it,"
she said. Karen Bowers, branch manager of Harbor Federal, said that the vendor has to be
the one putting on the hold. "They issue the transaction," she said.

[datasuspect]

89. that is informative

however, if a person wants to avoid that, all they have to do is go in and pay for their gas first and them pump.

easy solution, less trouble.

[Breeze54]

92. You're right. That would be easier, I guess but

in the deep cold of winter, sleeting and snowing.
Jumping out, swiping your card, pumping the gas and
leaving in a warm car, as fast as possible, is the goal!
:rofl:
At least that's my goal!

[datasuspect]

99. i only PRAY for deep cold winters

i am sweating my ass off in southeast texas right now.

gimme some snow!!!!

[Breeze54]

100. Hey, up here in 'Bahston' ;

it was close to 109 degree's (felt like it!) all last week!
But I feel your pain...;) I used to live in the SW. Dry heat!
I miss that and I'll trade you for the humidity! You in? :rofl:

[Phoebe Loosinhouse]

83. What if this about manipulating oil profits and markets?

Why is this thread about gas stations?

Stay with me here - one of the big questions on this thread has been why? Who benefits? Well, a company that posts a sale as $50.00 when it was only $10.00 might show more revenues than they actually pulled in. Why should it take so long to correct? Are there REALLY any sales that can truly be depicted as being OFFLINE? I doubt it - maybe a mom and pop gsa station in podunk, but the rest of them are online all the time.

This could effect:

reported sales
reported profits
executive compensation based on performance
hedge funds
price of oil worldwide.
demand predictions


Why would some little person in anytown USA who spends 10.00 on a gasoline purchase have it somehow recorded as a $50. 00 purchase?
And if you multiplied that one purchase by millions?

[Phoebe Loosinhouse]

91. Totally off the mark? Anyone?

Do these holds somehow find their way into reported sales? I'm not vested in the answer, I'm just curious.

[Breeze54]

93. I don't know but

you're first post made a lot of sense to me!
Profit$, profit$, profit$! Especially oil companies!
The more they sell, the better the deals the GS' get?
:shrug:

[rzemanfl]

90. This was an issue in Florida last year right after Katrina. People

couldn't buy food and such, I believe it was Hess that was doing it here and was putting a $75.00 hold on the account for any amount of gas.

[napi21]

96. It still puzzles me why so many people are enamoured with Debit Cards?

I have ONE but almost NEVER use it. I use my credit card for everything and pay it off at the end of every month. I get points for every dollar spent and cash back when I've accumulated a certain # of points.

I KNOW if I have a problem with a purchase and the seller is uncooperative, i can contact my Cr. Card Co. and have the payment reversed! I know the banks tell you you can do that with a Debit card too, but just try it! You're money is GONE!

I've heard this complaint about holds on your funds for a long time, and I really CAN see why gas stations, rental places etc do that. You are effectively giving them a deposit on a total that isn't final yet.

If you use a credit card...even for a rental, you might experience a hold on the funds initially, but your account is chargen the final charge when you are presented with, and pay your final bill.

IMO, Debit cards are a scam for banks and the retailers to make money and put the customer at risk. You do realize the charge to the retailer is LESS on a debit card than a credit card, don't you?

I suggest you either use a credit card or cash...period.

[Breeze54]

101. um....maybe because...

by napi21:
"I have ONE but almost NEVER use it. I use my credit card" <-- There's your answer!

Some people do not have and can not get credit cards. Didn't you know that?
Debit/check cards are quite handy and you don't have to carry actual cash or a check book!

[MysteryToMyself]

97. Was that made legal with the bankruptcy law?

I have heard there was a thousand pages to that bankruptcy bill. I don't know if that is true. I wondered what else would show up from that. A person should just put enough in to make their payments and charges and keep the rest in cash.

I couldn't believe they passed a harder bankruptcy bill, all the while saying to expect $300,000 medical costs per person during retirement. That is in addition to all the Medicare insurances. I guess they were afraid people would take medical bankruptcy and survive with something left to leave their children.