Credit card system could cause confusion
A $50 gas purchase at the pumps could tie up more than $150 worth of credit card space for days following the fill-up.
A pre-authorized payment system used by fuel stations allows credit card companies to put a hold of more than $100 on a card's available funds, on top of the cost of the gas.
By not disclosing this practice, retailers and credit card companies are violating consumers' rights, said Consumers' Council of Canada president Joan Huzar.
"If you don't know that this kind of thing is going on, then you could think you're putting a $40 charge on your card and it's not really that at all, it's $100," she said. "And that could leave you in a very embarrassing situation."
By warning consumers, businesses give them the opportunity to go inside to pay or decide whether to use their credit card or another method of payment, Huzar said.
Some motorists filling up on Regina's east side Friday were unaware of the pre-authorized hold.
"I'm a bit surprised," said one man while waiting for his tank to fill.
"It's just like when you go to a hotel," added a woman, who was unfazed by the news.
Indeed, hotels and rental car companies do follow a similar pre-authorized system of credit card payment.
Ted Stoner, a spokesperson for the Canadian Petroleum Products Institute, said the same method is used for all three services when something is purchased on credit without an exact cost determined before a credit card is swiped.
The contract is between credit card companies and retailers, he added.
"They require some sort of a liability be set up or be established against the credit card until the actual final amount is determined," Stoner said.
He didn't know what the major integrated petroleum companies that are members of the CPPI do to inform customers about the pre-authorized payment system. Whatever measures the companies take would be consistent across the country, he added.
But Jesse Taylor, a Toronto resident gassing up in Regina on his way to Calgary, said he was aware of the hold put on his credit card when he charges gas at the pump. In Ontario, Taylor said, customers are informed by a screen on the pump that if they know they are going to spend less than $75 to $100 on gas, they'll have to punch in the specific amount they want, or face a hold on their credit card plus the cost of the gas.
"It's a little bit better I guess, especially because they don't tell you here," he said. "I can see how it would be a pain for some people if they spend more than they actually wanted to."
Stoner, who said he will have to go look at the pump to confirm whether or not there is a warning about a hold on credit cards, said there aren't any plans to change the current system. If there is enough public demand, he said putting a notice on the pump would be seriously considered.
"This is something that's been around for eight to 10 years. I'm surprised it's coming up now," he said.
Source: http://www.canada.com
A pre-authorized payment system used by fuel stations allows credit card companies to put a hold of more than $100 on a card's available funds, on top of the cost of the gas.
By not disclosing this practice, retailers and credit card companies are violating consumers' rights, said Consumers' Council of Canada president Joan Huzar.
"If you don't know that this kind of thing is going on, then you could think you're putting a $40 charge on your card and it's not really that at all, it's $100," she said. "And that could leave you in a very embarrassing situation."
By warning consumers, businesses give them the opportunity to go inside to pay or decide whether to use their credit card or another method of payment, Huzar said.
Some motorists filling up on Regina's east side Friday were unaware of the pre-authorized hold.
"I'm a bit surprised," said one man while waiting for his tank to fill.
"It's just like when you go to a hotel," added a woman, who was unfazed by the news.
Indeed, hotels and rental car companies do follow a similar pre-authorized system of credit card payment.
Ted Stoner, a spokesperson for the Canadian Petroleum Products Institute, said the same method is used for all three services when something is purchased on credit without an exact cost determined before a credit card is swiped.
The contract is between credit card companies and retailers, he added.
"They require some sort of a liability be set up or be established against the credit card until the actual final amount is determined," Stoner said.
He didn't know what the major integrated petroleum companies that are members of the CPPI do to inform customers about the pre-authorized payment system. Whatever measures the companies take would be consistent across the country, he added.
But Jesse Taylor, a Toronto resident gassing up in Regina on his way to Calgary, said he was aware of the hold put on his credit card when he charges gas at the pump. In Ontario, Taylor said, customers are informed by a screen on the pump that if they know they are going to spend less than $75 to $100 on gas, they'll have to punch in the specific amount they want, or face a hold on their credit card plus the cost of the gas.
"It's a little bit better I guess, especially because they don't tell you here," he said. "I can see how it would be a pain for some people if they spend more than they actually wanted to."
Stoner, who said he will have to go look at the pump to confirm whether or not there is a warning about a hold on credit cards, said there aren't any plans to change the current system. If there is enough public demand, he said putting a notice on the pump would be seriously considered.
"This is something that's been around for eight to 10 years. I'm surprised it's coming up now," he said.
Source: http://www.canada.com
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