MONEY TROUBLES: ‘My hotel withdrew £100 hold fee – then never returned it’

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‘My hotel withdrew £100 hold fee – then never returned it’

On April 20, I went on holiday to Washington in the US where I stayed for four days.

I checked in to the hotel I’d booked and was asked to pay a £100 hold fee as standard. It was all very straightforward and I thought nothing of it.

I entered my pin number and the money was placed on hold to be released on check out day – providing I’d incurred no extra charges.

However, it's now been 16 days since I returned back to the UK, and the money still hasn't been returned. On my banking app it just shows up as a ‘pending’ transaction.

I queried it with the hotel on day four, when I was told it would take 10 days to show up in my account because I have a UK bank account. They said it had been released.

I’m now having no luck getting the money back at all. Should I be worried?

Fiona, London

Mirror Money’s response

When you check in to a hotel, it's not uncommon for them to request a hold charge. The official term for this is an authorisation fee.

This, in a similar way to pay at pump petrol station machines , acts as a security buffer, and if the money is not spent, it should be released straight away.

These hotel requirements typically exist to protect them in the case of damage or charges for facilities such as the mini bar.

The money should not be withdrawn, it should show up on your banking statement as 'held' or 'pending' and should be released as soon as the company confirms everything is ok – usually on check-out day, when it should be freed again.

Depending on the hotel, this hold could be a charge for your entire stay or charged each night – some hotels will charge as little as £50, others could ask for hundreds.

The amount of time a hotel hold may stay on your account can vary from hotel to hotel.

Generally speaking, a hold will be released within 24 hours of checking out.

Payment networks such as Visa or Mastercard are actually the ones that require a hold because of how hotel payment processes work.

If a merchant processes a card before the final amount is known, your card issuer will likely require an authorisation fee to ensure that you have enough money in your account to pay off a reasonable charge.

Payment networks also have set limits for how long an issuer can set aside a hold.

For example, Visa cards can only have a hold last for up to 30 days while Amex cards only allow holds for seven days.

In your case, if the funds are stuck at 'pending', the first thing to check is that the hotel has released the money.

Even after a hotel notifies a card issuer that a hold is no longer required, the issuer may still take a few days for the original pending charge to be removed.

You can contact your bank or card issuer to see if there is a hold up. Apps like Monzo allow you to dispute it automatically online – but only after 30 days. You can ask them to unblock it.

If the money still hasn't been cleared after one month, make a complaint to your bank, card issuer or building society.

If the hotel is at fault, you may be able to file a Section 75 claim to redeem the money back from tour credit card provider. This applies on payments above £100.

If you paid on a debit card, you'll need to complete a 'chargeback' form. If that fails, take your case to the Financial Ombudsman.

One way to help ensure your hold is released as soon as possible is to use the same credit card for the hold as you do for the room charge.

When you use two separate payment methods, it can take longer for the pending hold charge to be removed.

An Abta spokeswoman told The Mirror: "Holding fees are a charge made by a hotel usually on a daily basis which are intended to ensure that they have access to sufficient funds to cover any bills you may run up whilst in the hotel.

"If you give them a credit card this will affect your credit limit and if you use a debit card the amount may well be directly taken from your account.

"However once you check out and settle any outstanding bills the hotel should reverse any excess holding fees without undue delay.

"These fees are more common in the USA but they can on occasion be charged in other destinations. If it was booked as part of a package, ask the tour operator for help otherwise speak to your card company."

Disclaimer

Money Troubles aims to be informative and engaging. Though it may include tips and information, it does not constitute advice and should not be used as a basis for any financial decisions.

All information in this post was correct at date of publication.

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