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Debit card holds face court challenge
A Clearwater law firm sues Hess and AmSouth for $75 holds when people pumped gas.
By HELEN HUNTLEY
Published September 23, 2005
Is it legal for gas companies and banks to put a $75 hold on your checking account when you buy $10 worth of gas with a debit card? The question, publicized in several recent stories by the St. Petersburg Times, is up to the courts.
Clearwater law firm Staack, Simms & Hernandez has sued Amerada Hess Corp. and AmSouth Bank in federal court in Tampa on behalf of AmSouth customer Denise Grillasca, who bought $10 worth of gas Sept. 1 at a Largo Hess station and ended up with a $75 hold on her checking account that wasn't removed until Sept. 8. She didn't know about the hold until she was turned down when she tried to withdraw cash from her account at an ATM.
The suit asks for class-action status on behalf of all Floridians who bought Hess gas with a debit card and were not informed their bank accounts would have a hold for more than the amount of purchase.
Holds can occur at pay-at-the-pump gas stations because customers must swipe their cards before they pump the gas. Many gas companies ask for a $1 preauthorization from the bank, which is a way of assuring the account is valid. However, as gas prices have risen, some companies have asked for bigger authorizations, with Hess most notable for its $75 request. When the bank gives the go-ahead, it's on the hook for the amount of the authorization, so many banks use holds to protect themselves. Customers are denied use of the money on hold during the time it takes for each transaction to clear, usually one or two business days.
The lawsuit said the holds amount to deceptive and unfair trade practices, breach of fiduciary duty, breach of contract and conversion of funds.
By failing to tell Grillasca about the hold, Hess tricked her into buying gas from the company, the suit said. Had she known, she would not have made the purchase.
AmSouth recently changed its policy and no longer uses holds for more than the amount of purchase for pay-at-the-pump transactions. The bank declined to comment on the lawsuit. An Amerada Hess spokesman could not be reached for comment.
Helen Huntley can be reached at huntley@sptimes.com or 727 893-8230.
[Last modified September 26, 2005, 11:18:23]
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