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MONEY PROBLEMS: ‘My hotel collected a £100 lockdown fee – and then never returned it’

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“My hotel collected a £100 lockdown fee – and then never refunded it”

On April 20, I went on vacation to Washington, USA, where I stayed for four days.

I checked into the hotel I had booked and was asked to pay a £100 lockdown fee by default. It was all very simple and I thought nothing of it.

I entered my pin number and the money was set aside to be released on the day of departure – assuming I didn’t incur any additional charges.

However it has now been 16 days since I returned to the UK and the money has still not been refunded. In my banking app it just shows as a “pending” transaction.

I checked with the hotel on the fourth day when I was told it would take 10 days to show up in my account as I have a UK bank account. They said it was released.

I am now having no luck whatsoever in getting the money back. Should I be concerned?

Fione, London







When you check into a hotel, it’s not uncommon for them to charge a lock fee
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Picture:

Getty)

Mirror Money’s answer

When you check into a hotel, it’s not uncommon for them to charge a lock fee. The official term for this is an authorization fee.

Similar to paying at a petrol pump, this serves as a safety buffer and should be released immediately if the money is not spent.

These hotel policies are typically in place to protect you in the event of damage or charges for facilities like the minibar.

The money should not be withdrawn, it should show up as ‘held’ or ‘pending’ on your bank statement and be released once the company confirms everything is in order – usually on the day of departure when it should be released again.

Depending on the hotel, this deposit can be a fee for your entire stay or every night – some hotels charge as little as £50, others can charge hundreds.

The length of time a hotel credit can remain in your account may vary from hotel to hotel.

Generally, a reservation will be released within 24 hours of check-out.

Payment networks like Visa or Mastercard are actually the ones that require blocking due to the way hotel payment processes work.

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

Payment networks have also set limits on how long an issuer can unblock.

For example, Visa cards can only be held for up to 30 days, while Amex cards can only be held for seven days.

If the money is pending in your case, the first thing you need to do is verify that the hotel has released the money.

Even after a hotel has notified a card issuer that a hold is no longer required, it can 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 delay. Apps like Monzo allow you to contest it online automatically – but only after 30 days. You can ask them to unblock them.

If the money still hasn’t been released after a month, complain 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 get the money back from the tour’s credit card provider. This applies to payments over £100.

If you paid with a debit card, you will need to fill out a chargeback form. If that fails, take your case to the Financial Ombudsman.

One way to ensure your reservation is released as quickly as possible is to use the same credit card for the reservation as for the room fee.

If you use two separate payment methods, it may take longer for the pending blocking fee to be removed.

An Abta spokeswoman told The Mirror: “Holding charges are a fee normally charged by a hotel on a daily basis to ensure they have access to sufficient funds to cover any bills you may have during your stay at the hotel .

“If you give them a credit card, it will affect your credit limit, and if you use a debit card, the amount can be taken directly from your account.

“However, once you check out and settle any outstanding bills, the hotel should immediately reverse any excess holding fees.

“These fees are more common in the United States, but may occasionally apply to other destinations as well. If 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. Although it may contain tips and information, it does not constitute advice and should not be used as the basis for any financial decision.

All information in this post was correct at the time of publication.

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