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| BoA Credit Card Terminals Ripping Off Customers |
| 2005-08-24 |
| Whatever reason diners have for not adding a tip to their credit-card receipts, they probably wouldn't appreciate finding that the restaurant charged them one anyway. Because of a setting in credit-card terminals distributed by the nation's largest consumer bank, thousands of restaurants, without even knowing it, could be temporarily charging diners an automatic gratuity on top of the agreed-upon bill, reducing the funds or credit available to card users and potentially alienating customers in the process. A merchant services representative for Bank of America said that most restaurateurs likely don't realize that they are adding an extra 20 percent to the card authorization because it never shows up on the receipt. Bank of America both issues and processes Visa cards. The credit terminals do not discriminate between credit or debit cards or the brand of card. Holds on funds are commonplace, so the bank provides merchants with equipment that processes the extra charges, said Sharon King, a merchant services representative for the company. In the case of Thai 65 (restaurant), customers were being charged the 20 percent gratuity, regardless of which bank issued their credit or debit card, until the terminal's settings were changed. King insisted that because such holds are not illegal, merchants should be able to take them. She added that Visa's policy is merely advice to merchants. In Ross' case, though, not only was an extra 20 percent charge held, most of it was never dropped. The restaurant processed a final tip of 15 percent anyway, though he did not authorize a tip on the receipt. Sawangpob said it appears one of his servers, disappointed at not being left a tip, took one anyway and was able to do so because a tip charge was already authorized. This is a separate problem that the manager said he would fix. The practice of charging more than an agreed amount is a felony in Washington called "factoring." While technically criminal, factoring is rarely investigated by law enforcement, so consumers are usually left to monitor and investigate their own account irregularities. Visa's Jones said that consumers should always keep their receipts and reconcile them with the account statements they get in the mail or view online. |
| Posted by:Anonymoose |
| #1 The bank sets aside 20% for the tip when they authorize the payment. So far, so good. And that's really most of the story. Some folks are skimming, cheating, "factoring", but that's not what the bank story is about. Some servers know about the set-aside and steal, so watch your statements! If the server got too ambitious and added a 100% tip, it would not be authorized by the bank. Slow news day. |
| Posted by: Bobby 2005-08-24 12:15 |