So, I wanted to post this here, in the hope that someone who knows more about the world of card transactions than I do could give an opinion.
The following happened to me with a competitor of Monzo’s recently. I shall not name it (although I’m sure you can all guess who it is), because my question isn’t about the competitor, but about industry practices:
- In early September I went to Pret and paid with said competitor’s card. I got a notification and it was deducted from my account.
- About 5 days later I got another notification that the charge was reversed. Odd, I though, I need to contact the bank to see what’s happening. Life is busy, I forgot.
- Yesterday (I.e. almost exactly a month later, I had forgotten about the reversed transaction) I happened to open said competitor’s app on my phone for the first time in a few weeks. I noticed that just yesterday morning there was a charge from Pret on my account although I hadn’t been to Pret in weeks. As the balance was really low I was now at a balance of 2p. I did not get a notification for this transaction,
- I contacted the bank’s support (always easier to do when money is taken, than when it’s given to you ) and was told
- The transaction was linked to the one last month
- The original auth was reversed by the merchant. Likely in error.
- After the merchant noticed they repeated the transaction offline yesterday morning. There are no notifications for offline transactions
- Had there been 3p less in my account, I would’ve gone into unauthorised overdraft.
- This unauthorised overdraft would’ve resulted in charges, and crucially reporting to credit reporting agencies.
- There is no time limit for a merchant to repeat a transaction in this way. Theoretically they could do that 10 years after the original auth (although the card would’ve expired by then, presumably)
Now to my actual question: It’s particularly those last two points that don’t seem right to me: Is it standard practice that merchants can repeat transactions for years after the original? Is there no “statue of limitations”? Is it standard practice to report those cases to CRAs? After all it’s not my fault at all. Or do you reckon these are simply policies of a specific bank?
I would love to have some thoughts on this matter from those in the finance world…