Consumers are being dealt a poor hand on annoying card ‘holds’, says JEFF PRESTRIDGE

If you pay for your gas at the pump, regularly go to a hotel, or like to rent a car when you go on vacation, you probably know what a credit card hold is.

This is when a company temporarily blocks a certain amount of your card’s outstanding credit limit to ensure you have the means to pay for goods you have yet to receive.

It’s a way to ensure you have enough credit when it’s time to pay – whether you want to fill up on gas or check out of a hotel and put up with late-night raids on the minibar.

It’s a system designed to protect businesses from fraudsters and chancers – and in the case of self-pay pumps, it’s also used to verify that motorists have the financial means to pay before putting fuel in their tank.

Still, the use of credit card blocks is not universally welcomed.

Some consumers have been unable to use their cards because companies have been slow to revoke holds, leaving them with insufficient funds to pay for goods. At some hotels it may take several weeks before the reservation is canceled. Quite irritating.

Others have suffered the shame of having a transaction declined because they didn’t have enough credit to meet the amount requested by the merchant (a problem that sometimes occurs with self-pay pumps).

When people return a rental car at the end of their vacation, the reserved credit can be plundered by the car company to cover the costs of repairing scratches or refilling the gas tank.

The terms of the credit card freeze – length and amount – are determined by the merchant and customers must be informed in advance how much of their credit will be reserved. Yet individual retailers are reluctant to shed any light on the individual policies they implement: the amount of credit they reserve on customers’ cards and the time it takes to clear a hold.

Hotel groups De Vere, Marriott and IHG did not respond, nor did car rental company Avis. Only Europcar played ball. Fishy.

In theory there is nothing wrong with holding credit cards, but in practice companies hold all the cards. They must do more to ensure that consumers are treated fairly – and that compensation is paid if holds are not lifted in a timely manner. If you have suffered damage as a result of a credit card freeze, please email me at jeff.prestridge@mailonsunday.co.uk.

A fair deal? It could be for the once king of the jungle

Counting the Costs: Neil Woodford

It’s decision time for investors who lost money due to the collapse of investment fund Woodford Equity Income, managed by Neil Woodford – once king of the retail investment jungle.

The fund closed in 2019 after a major institutional client was unable to get its hands on the money it had invested. It marked the beginning of the end for the fund, which was stuffed with illiquid investments that should never have been held in vehicle-equity stocks.

It also curtailed Woodford’s career, allowing him to enjoy the exotic fruits he earned at the expense of his investors, while putting Link – the company brought in to represent the interests of fund investors – under heavy regulatory scrutiny ​​because he failed to fulfill his duties.

The decision investors (at the time the fund was suspended) will have to make in the coming weeks is whether to accept – or reject – the compensation offered as a result of an agreement between the city’s regulator and Link. On the plus side, the indemnity – at least £180 million – represents money on the table, even if it would not be received by investors until the middle of next year. The downside is that it is neither generous nor fair: a range of experts say compensation should be closer to £1 billion.

For the compensation plan to be approved, at least 50 percent of voters must approve it by number and 75 percent by value. If this happens, it will put an end to the class actions launched by several law firms against Link – and perhaps also those against other related parties such as investment platform Hargreaves Lansdown, which promoted the Woodford fund until the day it began trading shares was suspended.

I’m not an investor in a Woodford fund, so I have no role in the game. But it appears the Financial Conduct Authority is more intent on putting an end to this sad saga than ensuring financial justice is achieved. As one Woodford investor told me rather forcefully, “The recovery settlement appears to be a cheap settlement.”

The vote could be close.

Meanwhile, jungle VIP Neil Woodford, above, has yet to be held to account by the regulator. Regardless, he continues to enjoy the good life. Yes, life isn’t always fair.

Shoppers that made me blush…

Redeem: Jeff collects for children in need

Thank you to the shoppers who kindly stopped by eight days ago to say hello and drop a few welcome tokens into my Children In Need bucket. I was gathering at The Oracle, a large indoor shopping complex on the banks of the River Kennet in Reading, Berkshire.

Although one donor mistook me for Keith Chegwin, I didn’t have the heart to tell them that the brilliant Cheggers sadly passed away almost six years ago.

Another customer, a Mail on Sunday reader, spent 15 minutes telling me what he thought of the government (unprintable) – and then marched off without donating a cent.

I trust he is now a little happier in light of the Chancellor of the Exchequer’s decision to respect the triple lock and increase the state pension by 8.5 percent from April next year.

My attempt to entice shoppers to buy a small Pudsey Bear and its companion Blush fell on deaf ears, even when I mentioned that my colleague Toby Walne (a collecting expert) thought Blush could be a smart long-term investment. Thanks to Toby’s advice, I am now a proud owner of Blush, which will join my collection of football memorabilia in storage. donate.bbcchildreninneed.co.uk.

Insurers take the biscuit

A friend grabbed me last weekend as I walked through Dinton Pastures Country Park in the dark as part of an event organized by First Days Children’s Charity. She wanted to know why her car insurance had risen from £492 to £708, an increase of 44 per cent. This despite a record of no-claims going back more than ten years.

My friend is a police officer who knows how to handle a car and is an advocate of adhering to speed limits. She’s also a single mother who lives on a tight budget and spends much of her income paying for before- and after-school clubs (and other activities) for her energetic (and delightful) eight-year-old daughter. “It’s a rip-off,” she told me. Even looking around hasn’t worked for her.

“Insurers are taking the biscuit,” she added. All I could do was nod in agreement. After all, it’s an argument I’ve been making since the beginning of this year. Insurers are fooling us.