Credit Cards Versus Unauthorized Charges

One of the little known facts about credit cards is that merchants must obtain a specific authorization each time the charge your card. They are generally not allowed to keep your card “on file” and just charge it whenever they see fit. Doing so opens them up to the possibility that the customer may request a chargeback. In such a situation, it is up to the merchant to prove that they were specifically authorized to make that charge.

Hotel Goes Crazy With Your Card

Over at travel columnist Chris Elliot’s site, there is an interesting story of a Priceline customer who returned from his vacation to find out that the hotel had added several unauthorized charges. The charges included cleaning and booking fees that exceeded the original cost of the reservation. Eventually, the traveler’s Visa card ate the charges, but the key moment came when the representative from Visa asked Priceline if the customer had authorized them to allow the hotel to directly charge the customer’s card. In the absence of such authorization, cardholders hold a strong case for a chargeback. In this instance, the hotel did not receive the customer’s authorization nor did it even notify them of the charges. The customer simply found the charges on his card when he returned.

A Similar Experience With United

One of the reasons I tried hard to avoid United is that I had a similar experience. I received a voucher from one of their inevitable customer service screw ups. In order to use this discount, I had to call the airline, pay for my flight with a credit card, and mail the certificate it. No this was not decades ago before the Internet,  but just a few years back. Anyways, I confirmed the correct, discounted price over the phone and mailed in the certificate. When my credit card statement arrived, I was charged the correct price, along with two additional charges that were labeled “ticket by mail fee”.  Of course, the ticket was issued electronically, it was not ticketed by mail, and I never authorized the charges. When I called United, they thankfully did not try to claim the fee was legit. Unfortunately, they simply wished to offer me more of the same vouchers instead of a refund. When they hesitated,  I indicated that my next step would be to submit a chargeback. I insisted that my credit card was charged without my authorization and they agreed to mail me a check. I eventually received the check, and that is the last time I remember doing business with them.

Conclusions

Before submitting a purchase, merchants must receive specific authorization from the card holder, each time. To do otherwise is to submit an unauthorized charge and that is tantamount to fraud. Consumers need to closely monitor their statements to look for unauthorized charges. Credit card use requires to parties to consent in order to be processed legitimately. By making sure that your authorization was given for each charge, you can ensure you are not the victim of an overzealous, or scamming merchant.