Debit/Check Card Deception

[joybelle5445]

What is the name of your state?What is the name of your state? AlabamA

I am so sick of all the crap from banks. A friend of mine used his debit card at WalMart for a $20 purchase. When he called the bankline for the balance a couple of days later, the balance was off an additional 20. We racked our brains trying to figure out the deal. He spoke with the bank and they offered no help.

I came across my debit card info (I refuse to use it since anyone I know who has, has had nothing but trouble, sooner or later) and I would like to share its contents and then inquire about it.

"When you use your check card" (also called a debit card)"with a merchant (point of sale transaction) to obtain goods or services or to obtain cash, the merchant may obtain a preauthorization for the transaction. We may place up to a four (4) business day hold on your account for the amount of the preauthorization request. In certain circumstances, Visa permits the authorization amount to be estimated and the preauthorization amount may exceed or be less than the actual amount of the transaction. If the preauthorization request varies from the amount of the actual transaction, payment of the transaction may not remove the hold, which may remain on the account until four business days have expired.

FOR EXAMPLE, a merchant obtains a preauthorization for $50 but the final transaction, with a tip, is $55, the preauthorized hold for $50 may remain on the account for 4 business days even if the final transaction for $55 clears the account during that 4 day period."

This will affect the availability of funds. So, if a check comes through your account and it shows a less amount than the check (even though you actually DO have funds in it, but on hold), it is marked an insufficient, and the rest .....we all know how it goes!

First, if I'm checking out at WalMart and hand them a check card, it is a point of sale transaction. That means "same as cash" so how can they get an preauthorization of that amount? I smell something fishy here. The whole "preauthorization" bull really confuses me anyway. If anyone could shed some light, I would be all ears.

It just goes to show that we all need to read all the brochure material that is sent with the cards and other paperwork from the bank and credit card companies. Thanks for letting me vent.

 

[Tayla]

Please clarify where the deception is on this matter? In reading your well documented post I comprehend that:

"We may place up to a four (4) business day hold on your account for the amount of the preauthorization request. In certain circumstances, Visa permits the authorization amount to be estimated and the preauthorization amount may exceed or be less than the actual amount of the transaction. If the preauthorization request varies from the amount of the actual transaction, payment of the transaction may not remove the hold, which may remain on the account until four business days have expired. "

Which part of the above is deceptive? Its spelled out clearly and precisely how they will handle the matter.

 

[Veronica1228]

I would also like to know who told you that when you hand a cashier your checkcard it is "the same as cash." The only time that is true, is when you enter your PIN to pay for your puchase. If you sign a slip, it is just like using a credit card, and it must go through the authorization process which takes a few days to "hard post" to your account. Most banks do place a hold for 4-5 business days on these transactions.

You can call the banks thieves if you like, but this is actually a newer policy that banks were forced to use because of thieving and mathematically challenged customers. If you had your own business and you were losing millions of dollars every year on checking account customers, wouldn't you try something to protect your assets?

I'm not necessarily defending this policy, I am a banking customer too, and have received fees due to this new process. I am just explaining why this is in effect, and how it came about. If you don't like it, use cash.

 

[tammy8]

I guess I am confused ...

You seem to be saying that banks hold more than the amount of the transaction of the debit card? Right and correct me if I am wrong. I have never had this happen although I always make sure that I have the funds in my account to cover anything I purchase or write checks for.

Again if I am wrong, tell me but I am seeing that you are floating checks????? You can't do that anymore due to electronic banking that most banks use today. I used to do that all the time but the banks have caught up on this practice of using their funds to do so.

 

[Veronica1228]

I guess I am confused ...

You seem to be saying that banks hold more than the amount of the transaction of the debit card? Right and correct me if I am wrong. I have never had this happen although I always make sure that I have the funds in my account to cover anything I purchase or write checks for.

Again if I am wrong, tell me but I am seeing that you are floating checks????? You can't do that anymore due to electronic banking that most banks use today. I used to do that all the time but the banks have caught up on this practice of using their funds to do so.

Usually the only time you will see this is from places like restaurants where they will put in an authorization for more than the amount of the slip because they are adding in the gratuity. Otherwise, it's usually for the amount of purchase.

The OP's scenario is unusual. I'm guessing that the cashier at Wal-Mart ran the card through two times.

 

[tammy8]

I guess this seems to be true cause I had a debit at a night club without the tips added in. It came through like the actual purchase without the tip and then a couple of days later, it had the purchase and the tip.

 

[Veronica1228]

I guess this seems to be true cause I had a debit at a night club without the tips added in. It came through like the actual purchase without the tip and then a couple of days later, it had the purchase and the tip.

This is where people get into trouble with having their account overdrawn. In your case, if you had only enough funds in your account for the amount that you signed for, you would have been overdrawn because of the original authorization that the night club ran through. This is why people get so angry at the banking system. However, the bank is holding funds for a debit card purchase so that they do not take a loss from these types of transactions. Checkcard purchases are guaranteed transactions, and the bank has to honor them once approved even if the acount is -$100,000,000. The bank has no way of knowing if the double swipe at Wal-Mart etc is intentional, or a cashier error.

Instead of getting angry at the banks, consumers should focus their frustrations on retailers, restaurants, car rental agencies, hotels etc that overcharge on the authorization, or double swipe. They are really the ones responsible for these types of situations. It's also probably a good idea to never let your card out of your sight, and use your veto power if it looks like they are running it through too many times.

 

[joybelle5445]

Well......

It just doesn't make any sense to me. When the merchant swipes the card, the result should be an authorization of that amount, not a preauthorization. Sounds like a scam. Either you have the money in that account or you don't, it should be that cut-and-dry. Maybe I am not up to speed on modern banking, but simpler is better in my book.

 

[joybelle5445]

Well, duh, if I would read a little more carefully, I might learn something.
I am referring to the "hard post to your account" comment. Looks like it would be a simple thing that when you make a card transaction (where it would link to the bank) it could go ahead and give you a true balance (as of that particular transaction). I understand that paper checks are the problem as far as a true balance; however, probably within this next year, most merchants are going to the new system that deducts the amount at the time of purchase. If all purchases could be deducted in real-time, that would be ideal.

Thanks for the input. I am constantly learning at these freeadvice forums.