Moneywise helps a reader who was overcharged at the pump
Here’s a potential problem that could affect millions of people. It’s a new system coming in at supermarket petrol stations to stop people filling up their motors and simply driving off.
It seems a fair system, involving drivers putting their cards in a ‘pay-at-pump’ device before filling up. Then what is known as ‘pre-authorisation’ happens, which gives the retailer your details so it can charge you for the amount of petrol you take.
As I understand it, the pre-authorisation should stay on your account only for as long as it takes for the real amount to be debited, at which point it lapses. The pre-authorisation amount could be as little as £1, so users are likely to see a £1 debit on their accounts followed by a £1 credit once the proper payment goes through.
Understand it? I’m not sure I really do, but its aims are to cut down on fraud and make it easy for us to pay for petrol through these convenient machines. It’s been piloted at various retailers and is set to go nationwide either later this year or in early 2020.
But there have been problems, as I discovered from Kettering-based reader, SC.
“I put my card in a Tesco ‘pay-at-pump’ machine for £10 of fuel,” he told me. “But £99 (one transaction of £1 and one of £98) was taken from my account. Tesco told me to ring my bank, who told me to speak to Mastercard, who said it couldn’t help. I was told it would take seven days to sort out and it led to a direct debit being bounced.”
That’s obviously not good, but it got worse. SC was charged a £30 admin fee and the bounced direct debit led to further charges.
“It ended up costing me more than £300 as it was my car tax direct debit, which means I missed the payment and had a fine for not taxing the car!”
He took up his complaint with Tesco but was given short shrift. “I told Tesco it should put stickers on the pumps warning people but they said it was down to my bank.”
In fact, SC wasn’t the first to fall victim. Last year, several people took to social media when they thought they had been charged £99 for much smaller amounts of petrol at some Asda stations.
Mastercard told me back then: “A change in industry rules meant that petrol stations with automated fuel pumps were required to pre-authorise a value equivalent to a full tank of fuel, so customers didn’t fill up with more than they could afford.”
In short, it was to stop people filling up their cars and then driving off without paying the full amount. The new system had obviously been piloted at some Tesco petrol stations, leading to SC’s problem.
A Tesco spokesperson told me: “I can confirm that we initially requested a pre-authorisation of £1 when SC entered their payment card. Once the card was validated and the car filled up with fuel, we charged the card with the full payment of £10. If £99 was reserved from the account, we believe this will have been done by the card issuer. While we have no record or visibility of this pre-authorisation, payment card issuers can pre-authorise up to £100, even if the pre-authorisation request from the retailer is less than that. We are confident that the pre-authorisation request of £1 and the £10 payment request were all that came from Tesco. If the customer wants to query the £99 pre-authorisation further then they should take this up with the card issuer.”
SC was scathing about that response, saying: “Tesco is accountable as it sold me the petrol, not the card issuer. Their pumps should carry warnings.”
I agree that pumps should carry warnings, especially when the scheme is rolled out nationwide. But my investigations suggest that Tesco was in the right in this instance and the problem lay with SC’s bank, Cashplus.
Mastercard told me that the issuing banks set the pre-authorisation limits and Cashplus confirmed that it had set its limit at £99, which is why SC had fallen foul of it. Cashplus told me that the limit was clearly labelled in its terms and conditions but I pointed out that few people read the terms and conditions before filling up their cars with petrol.
The bank proved very willing to sort things out with SC, and I got the impression that it would put him back into the position he had been in if he hadn’t fallen foul of the £99 pre-authorisation, which had been higher than the funds he had in that account at the time.
In other words, I expect SC to have his losses refunded. However, he has been busy and hasn’t been able to talk to the bank to sort things out yet.
So I’m publishing this warning now to all drivers: check the pre-authorisation limit your bank sets when you use a ‘pay-at-pump’ machine. Make sure you have enough cash in your account to cover it, plus the cost of the petrol you buy. That should ensure you avoid a similar upsetting situation as that endured by SC.