JEFF PRESTRIDGE: Hard to credit

My article seven days ago on the mismanagement of credit card holds by companies and banks drew a strong reader response (a big thank you).

Some accuse companies (primarily car hire) of using holds to take unwarranted payments - more on this next week. But most reader wrath is reserved for tardy banks which fail to remove these holds promptly, thus compromising using the cards.

This is most prevalent when someone checks into a hotel. The hotelier arranges with the customer's card issuer for an amount of credit to be put aside that covers the likely final bill.

This will be sufficient to meet the accommodation cost if it has not been pre-paid - plus a buffer for incidentals such as room service.

In most cases, the system works like clockwork, with the hold being automatically removed when the customer checks out and pays any outstanding bill. But occasionally, the bank (card issuer) forgets to cancel it.

Kept on hold: Eventually, the pending payment was removed by HSBC and David's card balance restored

David Coxon has been a victim of such tardiness.

In October, the 69-year-old ex-Sheffield United footballer took his family for an 11-day break to Dubai. Two rooms were booked in the Le Meridien Dubai Hotel and a sum of just over GBP5,180 was reserved against his HSBC Premier credit card.

David, now retired after building a hugely successful demolition business, was assured by the hotel that the hold would be removed on checkout (October 29) and no money would be taken.

Being a frequent traveller, he was accustomed to such holds.

On checking out, he paid his bill and the hotel said that the hold had been cancelled.

But Le Meridien's cancellation of the hold was not actioned by HSBC. As a result, when he came to book some flights (for his 70th birthday) upon his return to the UK, his payment was declined. The hold, together with the payment to Le Meridien, meant he didn't have sufficient credit available on his card.

For the next 23 days, David battled valiantly to get HSBC to remove the hold.

But it refused, even when he sent them a copy of the receipt from the hotel voiding it. 'I spent hours every day on the phone to HSBC trying to get them to remove the hold,' says David. 'But I kept getting the same answer, namely that a payment for GBP5,180 (the amount of the hold) was pending and they could do nothing about it.'

Eventually, on November 23, the pending payment was removed by HSBC and David's card balance restored. No explanation or apology was received. Indeed, the only subsequent communication from HSBC has been to tell him that it has yet to resolve the problem.

'Disgraceful,' says David.

He is also aggrieved by the fact that the flights he had tried to book for his birthday next April have now cost him GBP769 more than if he had bought them when he wanted to. I asked HSBC to look into what happened to David. It said it was still examining his case.

Reader Graeme Horne has also been infuriated by a hold taking a while to be removed from his credit card.

The 63-year-old semi-retired company doctor from Moreton-in-Marsh, Gloucestershire, booked three rooms at the De Vere Tortworth Court hotel so he and family could attend a funeral.

On departure, he paid the GBP530 invoice, only to discover three days later that there were two payments to the hotel pending on his bank account - GBP530 and a further GBP109. Surprised, he contacted De Vere, to be told that the GBP109 was a hold put on his card when he checked in.

Although the GBP109 hold was subsequently removed, Graeme says De Vere needs to keep customers better informed. He says: 'A guest should be informed that a credit card hold is being applied at check in.'

De Vere insists that all customers are told about a hold before they check in.

Not in use... hundreds of branches axed by big banks

Thanks you to rotarian Susan Robinson for sending me a picture from her travels to the cathedral city of Winchester in Hampshire - a sign suggesting the local Barclays is not in use.

'I know the sign relates to the letterbox and not the branch itself which remains open, but it did make me stop in the street and smile,' she says.

'After all, it's a fact.

Many branches are no longer in use.' Susan is dead right.

Out of action: A sign in the cathedral city of Winchester in Hampshire suggesting the local Barclays is not in use

According to cash machine network Link, nearly 1,250 branches have either been axed or put on death watch since the start of last year. Furthermore, Lloyds (45 closures last week)[1] and NatWest (29 last month)[2] are poised to shrink their networks further in the coming months.

The only shaft of light in this sorry tale is the emergence of a network of banking hubs[3] - shared bank branches - that are being opened in communities that have been left bankless by the withdrawal of the big banks from the high street.

Twenty five hubs are up and running, five more will open by the year end while another 70 are in the pipeline. Indeed, the 100th agreed hub will be in Richmond, North Yorkshire - part of the constituency of Rishi Sunak.

Labour says more hubs will follow if it wins next year's General Election.

> Revealed: 27 towns that may get banking hubs - is yours on the list? [4]

How can car cover go up if a claim is 'non-fault'?

Isn't it about time that someone in regulatory circles banned insurance companies from penalising motorists involved in accidents where the other driver is to blame?

Currently, if a motorist gets shunted from behind by an errant driver and claims for any damage caused, it is registered by their insurer as a non-fault claim.

Despite being blameless, the motorist will then be rewarded with a sharp premium rise at renewal - an increase over and above that currently being meted out by insurers to most policyholders.

Blame game: If a motorist gets shunted from behind by an errant driver and claims for any damage caused, it is registered by their insurer as a non-fault claim

The insurers justify this on the grounds that once a policyholder has made a non-fault claim, they are more likely to make future claims, making them riskier to insure.

No doubt the Association of British Insurers (ABI) - the defender of all the wrongs committed by insurers - has evidence to back up this fact. But let's be honest: statistics can often be dressed up to support any argument (lies, damned lies and statistics).

Bob French, a 77-year-old retired bricklayer from Potton in Bedfordshire, was involved in an accident earlier this year when a van hit his Hyundai Kona from behind. The van driver didn't stop, but Bob managed to trace the van and the driver admitted liability.

Although the claim was non-fault, Bob has now seen his insurance rise by more than 60 per cent. 'It all seems grossly unfair,' says Bob. 'I have been driving for 60 years without an accident.

Then someone runs into the back of my car, the driver scarpers and I end up being penalised. Where's the justice in that?'

He's not alone in feeling aggrieved. Another motorist who made a non-fault claim after 64 years of accident-free driving saw his premium jump by 281 per cent.

The reader, from Doncaster in South Yorkshire, says: 'The more fresh air you can blow into the mercenary practices of insurers, the better.'

Maybe, the ABI could care to comment?

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References

1. ^ Lloyds (45 closures last week) (www.thisismoney.co.uk)
2. ^ NatWest (29 last month) (www.thisismoney.co.uk)
3. ^ emergence of a network of banking hubs (www.thisismoney.co.uk)
4. ^ > Revealed: 27 towns that may get banking hubs - is yours on the list? (www.thisismoney.co.uk)