Expedia screwed my bank account ?

[basa]

Last week I booked 4 flight tickets to LAX with Expedia at a cost of £1500+. I immediately received confirmation via Expedia's web site (printed off a receipt) and by email.

My online bank statement showed nothing going out of my account until early this week when each of the 4 ticket costs were deducted individually.

The same day my debit card was refused at 2 shops !! My bank statement still showed my account was OK, but on phoning my bank was told I was overdrawn by £1000 !!!

Apparently what had happened was that Expedia had placed a "Deferred Payment Processing (or Pre Authorisation)" amount on my account, which reserves the amount to be drawn later, but doesn't actually take the cash at that time. 5 days later when they did take the cash (as 4 separate amounts) it appeared (to my bank) they had taken the £1500+ amount TWICE (the 'deferred' amount plus the actual amounts) which put my account in default !! Apparently the deferred payment should have been removed at or before the real amounts were taken, but because none of the 4 separate amounts taken matched the original total reserve amount this failed.

Although it was sorted within an hour of my discovering the problem I was fortunate there were no DDs or other payments due during that time else I would've been charged for returned items.

Anyone else experienced this and what would have happened about charges for payments returned due to lack of funds ?

[Derek]

This used to happen with some customers when I worked for Expedia a few years back.

There didn't seem to be any reason behind it as some customers went through without a hitch and others had the same experience you had.

Despite investigating everything we could behind it we never got to the bottom of why it happened to some customers.

Any time customers incurred charges for this they were given the charges back by their bank which made me think at the time the problem lay with them.

Originally Posted by basa

Anyone else experienced this and what would have happened about charges for payments returned due to lack of funds ?

Yes - in a way.

It is actually a normal part of credit card (and debit card) processing - there is an auth - that tells the system a purchase is going to be made, followed by a 'capture' - which should then equal the original auth.

Your card has, effectively, 2 credit limits - an 'auth limit' and the actual credit limit. (The two would usually be the same, more or less.)
When an auth is placed against the auth limit, it ensures that there aren't a whole string of transactions being applied to the account. It also allows for the fact that sometimes - e.g. supermarket - the auth is done when you're at the till, and the capture is not transmitted to the card handling firm until later, when the till is cashed up. So the auth limit ensures that your credit limit isn't exceeded in these conditions.

Expedia were wrong to do it the way they did - if they got an auth for a single transaction, then that's what they should have posted against our card.

Anyway, one other scenario where this can catch you out. If you're going on a business trip, say, and they've supplied you with a wad of travellers cheques. You get to your hotel, they want a credit card - so you give them your card, because you know you'll be paying with TC's when you leave.

The thing is, in the USA they actually place an auth on your account for the amount they expect to bill when you leave. If you then pay by TC, the auth stays on your card.

If you do this at a number of hotels over a week or so, you can suddenly find yourself embarrased when your card is declined even though you KNOW it's not been used.

An auth that's not completed as a sale is automatically removed from the auth limit after 10 days (or thereabouts) which is a VERY long time if you're stuck with no credit. My advice - if you expect to go to the USA, explain the above to the bank and ask them for a temporary limit increase to cover whatever auths you think you'll need to absorb during your trip. I've found banks quite understanding of this problem. What they do in the USA is actually against VISA rules, but when did international rules ever stop the Americans from doing what they wanted to do...

[Derek]

Originally Posted by ScaredWebWarrior

Expedia were wrong to do it the way they did - if they got an auth for a single transaction, then that's what they should have posted against our card.

They do. An auth code is generated by the website when a booking is made and attached to the record.
When the tickets are printed they use this auth code for printing the tickets.

99.9% of the time the customer is charged once. Every so often the customer is charged using the auth code generated by the site but the credit card company doesn't realise this has been done and doesn't release the authorisation.

[Shaun]

Yep, had the same problem when we bought a PC from Dell, they reserved the money but then never took it (it dropped off a week later) but two days before it dropped of tried to take the money.

They didn't get it as there wasn't £3000 spare on the card and canceled the PC. After a lot of wrangling they finally got it sorted. It's a really bad flaw in the system.

Saying that, it is a phantom transaction so will fall off the end and will never show on you statement (or cause you any charges) but like you said could have caused you to bounce a few DDs!

[basa]

Originally Posted by dezzo

...........Any time customers incurred charges for this they were given the charges back by their bank which made me think at the time the problem lay with them.

More likely they refunded charges as the account didn't *actually* go delinquent, just looked like it did because of the 'phantom' deferred payment.

---------- Post added at 15:26 ---------- Previous post was at 15:22 ----------

Originally Posted by ScaredWebWarrior

......It is actually a normal part of credit card (and debit card) processing - there is an auth - that tells the system a purchase is going to be made, followed by a 'capture' - which should then equal the original auth....

What happened in my case was Expedia pre-authorised one amount for £1500+, but then took 4 separate amounts totalling £1500+. which didn't cancel the original authority.

[Derek]

Possibly. Trying to get to the bottom of it was a killer.

For the same problem to be happening more than 6 years since it was first seen can't be good

Originally Posted by dezzo

Every so often the customer is charged using the auth code generated by the site but the credit card company doesn't realise this has been done and doesn't release the authorisation.

If the amount charged does not match the amount auth'ed then they will be handled separately.

There is no 'link' back to the original auth through the auth code.

That is why separately charging 4 tickets when they were auth'ed as a single transaction is wrong. Solution: Either charge the tickets together or auth them separately. Either solution will work with all card processors. You will find that whether the amount/auth for the separate charges is taken from the original auth will depend on the card processor and probably the issuer too.

That might explain why it was so hard to fathom. My solution above will work for all card processors and all issuers.

[Derek]

Originally Posted by ScaredWebWarrior

*snip*That might explain why it was so hard to fathom.

I can't recall the exact way it was handled for bookings with multiple tickets. Suffice to say it wasn't quite as simple as just popping a card number into a credit card machine and waiting for an auth code.

Some of the charges were finally completed by the airlines and some by Expedia (well either Thomas Cook or TRX on behalf of Expedia) depending on the type of ticket being issued.

The problem only occurred with a tiny, tiny minority of the tickets issued and there was no pattern to the double charges.

Originally Posted by dezzo

I can't recall the exact way it was handled for bookings with multiple tickets. Suffice to say it wasn't quite as simple as just popping a card number into a credit card machine and waiting for an auth code.

Sometimes it is - depends entirely how your backend processing is done

Were these different entities separately charging the customer's card? that would make it much harder to implement.

My experience was in card processing of Internet transactions at a major credit card issuer/processor, so not quite the same as your scenario.

Originally Posted by dezzo

The problem only occurred with a tiny, tiny minority of the tickets issued and there was no pattern to the double charges.

Harder to spot a pattern if there's few enough of them. Add to that timing issues and you'd need a good steady stream to find that pattern.

[etccarmageddon]

A few years back I ordered a white van from county van hire - I gave my card details over the phone for the van rental of about £50 - they took an extra £100 deposit for the van which I hadnt agreed to and wasnt even bloody aware of. I only found out after contacting the credit card company as I had a strange debit of around £150 on my bank account showing as pending.

To top it all - after using the van and returning it I had to keep chasing them for (weeks) for a refund of my deposit which they had promised would be in the post when I gave them the van back.