Unauthorized overdraft, transaction declined, later on accepted, why?

Help
1

Hi,

I have £50 arranged overdraft limit.

Recently an online shop attempted to charge me £600 and it was rightly rejected.

Later on the same shop tried to charge me the same amount again and succeeded sending my balance to -£600 unarranged overdraft making me not so happy bunny. I was already unhappy with the shop, now I’m also unhappy with Monzo for authorizing this.

Why the first time the transaction was rejected but the second time it succeeded? How does that work?

Thanks

2

You will have to contact Monzo using the in-app chat to ask them. We’re all customers on this forum so we can’t speak for why anything has happened with your account.

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3

Why were they charging you £600 in the first place?

I wonder if they did a pre-auth for a lower figure and then changed it.

4

The background to the story.

  • I placed an order on-line for that amount and paid with Monzo.
  • A week later that amount was refunded - no reason given. I assumed the shop cancelled my order, their website was showing the item was OOS, and purchased an alternative elsewhere.
  • A week later they attempted to charge me again and were refused.
  • Then two days later they tried again and this time got hold of the money sending me into an unarranged overdraft.

From what you are saying I gather that merchants have this trick up their sleeve (a pre-auth) that makes it possible for them to claw from my account whatever they want despite no funds and Monzo cannot prevent that. Is that correct?

5

I’m not 100% on how it works, just a guess really

You’ll need to speak to Monzo directly, if you search“ contact” in the app you’ll get to chat.

6

If the transaction is still pending, they haven’t got any of your money yet. Also, if it is pending, you aren’t in an overdraft yet.

You’ll need to speak to Monzo, in any case, to sort it out.

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7

And just to add to this part ^ you should definitely speak to the vendor to properly cancel the order - even if instance of being charged is sorted, as they have a valid order they may charge again.

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8

How do I tell if the transaction is pending? The app does not communicate to me that the transaction is pending, it doesn’t say this amount has been earmarked in any way, it shows it’s gone. I think momentarily there was also a message saying that I’m now using an unarranged overdraft.

If I go to the details of the transaction it shows 2 payments with this merchant, with total spent equal to 2 x £600.

9

Thanks for your responses and help. I think we are getting into too much detail here specific to this particular transaction.

I just wanted to know how come one day Monzo stops you from getting into an unarranged overdraft and the other seems unable to for seemingly the same kind of transaction.

10

Scroll all the way to the bottom of the transaction beneath “Something Wrong”. You’ll either see just the merchant name, or also that it’s pending.

11

Thanks. I can see some gibberish which I suppose is the merchant’s name. It doesn’t show as ‘pending’.

12

Understood. It a question only Monzo can answer, I suspect. And that answer may be specific to this transaction.

If you do get an answer, be sure to post it here for the benefit of others.

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13

Sure. Thanks!

15

I did have the money. Then the payment got refunded (no idea why) and I spent that money elsewhere on an alternative product from a different merchant.

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17

This is pretty rubbish that my ‘wallet’ is temporarily used for some payment flow shenanigans. It’s like “here, hold this money for a minute while we are are trying to open the till, and let’s pretend it’s a refund but it really isn’t”…

The merchant was Lenovo. The payment was made on 1/01, it was refunded on 9/01, on 14/01 they tried charging again (refused), and 16/01 they tried yet again and this time breached Monzo’s defences.

18

There used to be an option to chat with somebody. Now I can either dispute the transaction or report fraud. So it doesn’t seem possible to just speak with Monzo.

19

Go to the help section, type ‘contact’ in the search box and click on the ‘Contacting support’ article.

Once in the article, there should be a ‘chat with us’ link visible.

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20

^^^

21

I think this is one of the issues with instant notifications. With most banks, you wouldn’t have known any of this until they took the money on 16/01.

Maybe the fact that they had taken the money, and it being refunded led you to believe that the order was cancelled when they might just have been waiting for stock to arrive. As far as I can see, it’s an unusual situation, and you’ll hopefully get it resolved soon.

22

It’s not really a trick this is how it works you have two types of transactions.

“Sale” or “auth+capture”

One where say you are in a coffee shop and physically present. They are handing you the goods there and then. Some online shops will sometimes do this and then later issue a refund if not in stock etc

“auth” and then later “capture”

So paying at a petrol pump, or online shopping where the payment will only be collected or “captured” on shipping.

The “Auth” puts a specific amount on hold and gives the merchant a token back to then allow later to charge that payment method.

They can take any amount the hold just guarantees that up to that amount can at least be taken. They can take less than what they reserve, they can also take more but no guarantee the customer has the funds available.

When the holding expires the merchant can still attempt to capture but no guarantee that any funds will exist.

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