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Reader Lauren has a query about her hotel billing situation. She writes, “I thought I’d start a new life in Oregon about two years ago and things haven’t gone quite like I planned. Unexpected costs, car repairs, illness, housing, etc.
“Been living in a motel and the manager has ran my credit card for the month without my knowledge or authorization two times now. The charge just appears one day. I told her the first time not to do that. I might want to use a different card. She did it again this month, I didn’t have enough in the account and now I’m overdrawn. Can she keep doing this?”
No billing without permission
Credit cardholders should be reassured first of all that nobody can charge your card without your permission. They need to get your authorization first. This holds true whether you are paying in a mobile transaction or any other online “card not present” mode.
The Federal Trade Commission advises that it also runs afoul of the law “to bill people for negative options, automatic shipments or continuity programs without their express consent.”
A negative option is when people are opted into specific choices without their consent and without making disclosures, unless they opt out. For instance, a business should not send you periodic notices offering goods, such as books, and then follow up by sending you the goods and charging you because you did not refuse the offer.
It could also be that a magazine subscription is automatically renewed when it expires unless you expressly cancel it. In another example, a seller could offer you a free or discounted trial period to try out something and then automatically bill you at a higher rate when the trial period ends.
Hotel industry policies
The hotel industry is no exception to the rule that a cardholder’s consent should be obtained before charging your card. Typically, hotels will inform you and place an authorization hold on your card when you check in. This will cover your hotel bill and also tack on an amount for “incidentals.” Maybe you availed of the snacks left invitingly in your room, for instance, and this would be billed as an incidental payment.
Your card will be charged when you check out of the hotel. If you rack up more charges than the amount of the initial incidental hold, you will have to make up this difference when you pay.
In an extended stay situation, a hotel or motel will likely get your credit card payment hold authorization at the time you check in. It will then charge this card on file at periodic intervals, usually by placing a hold on your card for the money due.
Try to change card on file
Lauren, it seems your hotel manager was not acting illegally since the hotel would likely have gotten your authorization in advance (at the time you checked in) to place a hold on your card at periodic intervals for the amounts due. You should talk to them and see if you can change the card on file with the hotel for future payments.
Considering that this is an extended-stay hotel and you are not sure how long you will be staying there, make sure to switch to a card that has an adequate line of credit to cover your anticipated stay. Otherwise, you will incur a charge for going over your credit limit, if you have opted into such protection.
The bottom line
Businesses cannot charge your credit card without authorization. Hotels will typically get your authorization to place a hold on your card for your stay at the time you check in. They don’t need to notify you every time you are charged. Lauren, I hope you are able to sort out this issue with the hotel.
Contact me at email@example.com with your credit card-related questions.