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Gasoline buyers say 'hold on' here

Drivers question the fairness and legality of $75 account holds when using debit cards at self-serve pumps.

Published September 9, 2005

The banks blame the gas companies, the gas companies blame the banks, and the customers who end up with big financial holds on their accounts aren't happy with either one.

"This is worse than price gouging; it's a form of theft," complained Talice Sanford, one of many Tampa Bay area consumers outraged over payment practices detailed in a Times story Thursday.

When customers use a debit card to pay at the pump, some gas companies and banks put a financial hold on their bank accounts for as much as $75 even though the purchase may have been for much less. The hold is released when the transaction clears, which usually takes only a day or two, but can take up to three business days. During that time, customers are denied access to their money.

Heather Leinen said she ended up with a $75 hold on her checking account after buying $25 worth of gas at a Hess station on Hillsborough Avenue in Tampa. The big problem: She only had $72 in her account. She said AmSouth Bank charged her a $32 fee for insufficient funds and said "there is nothing they can do to help."

Mary Ann Ryan managed to incur a $225 hold at a Spring Hill Hess station through what she termed a "comedy of errors." After swiping her debit card, she realized she couldn't read the screen on the gas pump and drove to another pump. She swiped the card again, then realized after pumping 41 cents worth of gas that she had chosen the premium nozzle. She swiped the card again and bought $14.76 worth of regular gas.

"I was having a bad day," Ryan said, more than a little embarrassed. She said a conference call with Hess and Bank of America both on the line brought no relief. "Hess' position is any time you swipe a card on one of those pumps, it's $75," she said. "It just doesn't seem fair."

Others told tales of not having enough money to buy groceries over the Labor Day weekend. Several questioned the legality of the practice.

"The purchase price is on the receipt and that is what I agreed to pay/hold against my account," said Debbie Simpson. "No more, no less."

All but one of the complaints the Times received involved Hess purchases. Hess blamed the banks, noting they decide to place the hold.

"I'm not getting use of the money," said Rick Lawlor, retail marketing vice president for Hess. "The only thing I'm getting is many phone calls and headaches. I have convenience stores at most of my stores in Florida. Why would I want customers' debit cards shut off?"

In reality, there's plenty of blame to go around.

When a customer swipes a debit card at the pump, the gas company asks the bank to authorize the transaction and transmits an estimated amount. The most common authorization request is $1, said Chris Roberts, debit products manager for Wachovia Bank. It's a way for the gas company to be sure the customer has a valid account.

However, as gas prices have risen, some companies have been asking banks for larger and larger authorizations. Hess now asks for $75, which takes all the risk out of the transaction for the gas company.

As Hess points out, banks do not have to put a hold on a customer's account for that amount. And in fact, some banks do not. Wachovia, for example, says that as a matter of policy it does not use holds for pay-at-the-pump authorizations.

But as Visa explains, many banks do use holds "to protect themselves against the risk that card holders will spend more money than they have in their accounts." Once the bank has given its okay, the bank is on the hook to the merchant for the authorized amount.

Both Wachovia and Hess say that if a customer presses the "debit" button and enters a PIN number, the hold should be limited to the exact amount of purchase. However, some gas buyers who called the Times say they ended up with large holds even though they followed that procedure.

"I will not use my debit card again for gas," said Jose Martin Halle, who faced a $75 hold after buying $19.61 worth of gas at a Hess station in Orlando.

[Last modified September 9, 2005, 01:28:22]

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