The problem with taking pending out of balance (John Lewis' fault, to be fair)


(Allie) #1

So, everyone on here loves Monzo’s habit of deducting pending transactions immediately from the balance, except me. I have the perfect example from tonight of why this can be disastrous:

35

Now, a lot more went wrong with this to get to this point. John Lewis’ fraud team cancelled my first transaction (despite it going through 3-D Secure and thus them being protected from fraud; it was a bit of a show). The email looked a whole lot like a phishing attempt, too. They called me ‘Mr’ in the email despite it not being on the order, they gave a phone number that isn’t their normal one and when I called it wouldn’t proceed without my name. I should be able to give the order number and nothing else so you can prove you’re John Lewis.

The whole experience was just terrible and is the kind of thing that desensitises people to phishing attempts.

I refused, of course, and called the number on their website who confirmed it was legitimate and authorised it - but ran a second authorisation against my card! This is, of course, problematic for any debit card user and the only logical thing to say is you shouldn’t use a debit card on John Lewis’ site (though frankly, the whole experience has earned John Lewis a place on my bad list very quickly).

However, it would be especially problematic had this been on my Monzo account - that’s a huge chunk of money to have deducted from the balance and have to wait a week or more to get back! At least with other debit cards, while it becomes unavailable, it doesn’t throw off your balance calculations by that much for such a long period.

P.S. the really hilarious part is that by making a new authorisation over the phone, instead of using the original 3-D Secure authorisation, my understanding is that they lost the fraud protection from having a successful 3-DS authorisation, is that correct?


Tesco takes payments from customers' cards MONTHS after they went shopping
A better way to handle pending transactions
Response to Community Code of Conduct
(Andre Borie) #2

But don’t all the banks do this? They take it out of your “available” balance, which would have the same problem of leaving you out of money until the authorisations expire unless you have an overdraft or credit to offset it.

To answer your questios, yes pretty sure they lost the 3DS protection and would be liable for fraud. Whether a chargeback would actually succeed is another matter though - the card network would definitely see a valid 3DS-authenticated authorisation just beforehand and so would be very skeptical that it would be fraud.


(Allie) #3

They take it out of the available balance you can spend, but not the actual balance you use for record keeping. I did note, both will leave you out of money - but at least unlike Monzo, others won’t throw your books off for a week.


(Jolin) #4

But how would it be more problematic on Monzo? Regardless of bank, you have £1,440 that is unavailable to you to use. When the first £720 is credited back, your Monzo balance would go back up. This is exactly why I like Monzo. With another bank, I would be very confused as to why there is such a discrepancy between my ‘balance’ and my ‘available balance’. This caused me to miscalculate a transfer recently with another bank, as I thought a payment to HMRC from a couple of days prior had already been deducted, when in fact it hadn’t. Having to check a separate ‘pending’ screen is irritating, and I often forget. I want to see what my available balance is, and why it is that way, all in one place. :wink:


(Jolin) #5

I don’t have an ‘actual balance for record keeping’. To me, the actual balance is the money available to me. What practical difference or problem does it cause that for a week your balance is £720 lower than it will be once the pending transaction is cancelled? You can’t spend it in that week anyway. (As a side note, with Monzo you’d see this and contact COps asking them to get the pending transaction cancelled much sooner, wouldn’t you?)


(Allie) #6

Like I’ve said, I’m pretty alone in not liking this, and I love the overall Monzo product so no sense in mentioning it often. I just thought this was the perfect example of why I don’t like it and also, a good chance to rant about how absolutely awful John Lewis’ handling of orders they suspect to be fraud is (not as bad as Amex’s fraud team, to be fair - at least John Lewis was polite in their bizarre scheme that resembled fraud techniques itself - Amex adds rudeness to that).

That is one of the best things about Monzo, without a doubt, their willingness to manually kick off pending transactions like this. Could have been a life saver in this case or another case with an amount so large!

In fact, I’ll go so far as to say despite the display oddities, Monzo’s the only debit card I’d dream of using for large purchases (or for generally anything), because of how excellent their customer service team is. @simonb @HughWells and the rest of the Monzo crew have been so excellent. I may not like how Monzo handles authorisations, but no one is going to like everything about any product!


(Michael) #7

Aren’t flights processed in the same way? I’ve had KLM put similar considerable amounts of money twice into pending before, leaving me a few days with no money while I wait for one of the two pending transactions to be cancelled.


(Allie) #8

I’ve never had that, but it doesn’t surprise me. The fact large companies think this is okay is unthinkable. I just had this example right now, and it was a good way to show why I think having separate pending and actual balances is useful :slight_smile:


(Allie) #9

Honestly, not much (I realised my argument made no sense as I just have to report what Monzo does so going by statements is good for that presumably). I guess I just like knowing the real balance :slight_smile:


#10

For the record, I fully agree with you, so you are not alone :slight_smile:


(Adrian Hardy) #11

Interesting that some don’t like the immediately updating balance - in my view it is the only thing which makes having a Monzo account worthwhile and is the most visible bit of “magic” which sets them apart from the high street banks.


(Allie) #12

The problem with magic is that it isn’t real. Only unicorns!


#13

It might make a difference though, as any overdraft fees will be calculated based on actual, not available balance.

Obviously not for Monzo’s fixed fees, but for percentage fees.


(Allie) #14

That’s a really good point. Does Monzo consider pending authorisations removed from the balance to be ‘in overdraft’ for overdraft fee purposes?


#15

I concur with you on that, you are not alone


#16

Want to know this also , does anyone know how any other banks view this?


(Peter Roberts) #17

I actually like the way things are reported in Monzo but I wouldn’t complain about seeing my actual balance somewhere

@simonb this seems super important. I think it’d be good to document this somewhere clearly :thinking:


(Kieran McHugh) #18

If you’ve got a dead transaction stuck in the pending state, then reach out on the in-app chat.

In my experience, Monzo are actually better in this situation than any legacy bank: they will actually do their best to get the money back to your available balance immediately, rather than making you wait for it!


(Allie) #19

Definitely, see my post on that above. Monzo are great about fixing that. Still doesn’t change the underlying issue with how balances are presented (I used my Amex for this, I use Monzo for most day to day stuff now, but Amex still gets the big purchases).


(Andre Borie) #20

I read somewhere that by law a bank might only charge interest on posted transactions - while that was in the context of credit cards, I’m pretty sure this would also apply to overdrafts on debit cards.