Back in November 2021, reader Lauren had a query about her hotel billing situation:
“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?”
— LaurenBankrate reader
Lauren’s question remains relevant today, and so we’re revisiting this topic with updates since our initial publication.
No billing without permission
First of all, a business can’t charge your card without your permission. It would need to get your authorization first. This holds true whether you’re paying with your smartphone or for any other online card-not-present transaction. Hotels, extended-stay or otherwise, are no exception to this rule of no billing without permission, and it’s likely that the hotel obtained Lauren’s permission upfront to bill her card.
The FTC and “negative options”
There are sneaky ways that businesses can try to charge your card without your express permission, but authorities frown on such practices. For instance, the Federal Trade Commission advises that it runs afoul of the law “to bill people for negative options, automatic shipments or continuity programs without their express consent.”
A negative option refers to the practice of merchants automatically enrolling you into ongoing subscriptions or charges unless you take action to decline them or opt out. Examples of negative option transactions include:
- A business that sends you periodic notices offering goods, such as books, and then follows up with sending and charging you for the goods because you didn’t refuse the offer.
- A magazine subscription that’s automatically renewed when it expires unless you expressly cancel it.
- A seller that offers a free or discounted trial period to try out a product or service, and then automatically bills you at a higher rate when the trial period ends.
Hotel payments and policies
Hotels are considered merchants and must get a cardholder’s consent before charging your card. Generally, hotels can authorize a temporary hold on your card at check-in that covers your expected hotel bill as well as a nominal amount for “incidentals.” If you avail yourself of the minibar snacks left invitingly in your room, for example, the additional hold covers what you’ve eaten. At checkout, If you’ve racked up more charges than the amount of the initial incidental hold, you’d make up this difference with your final bill.
In an extended-stay situation, the authorized hold that a hotel or motel places on your credit card typically “prepays” the period you expect to stay. It can also charge the card on file at periodic intervals by placing a hold on your card for the money due.
Changing your card on file
It sounds to me like Lauren’s hotel manager was acting legally, because the hotel would likely have gotten her authorization in advance — at the time she checked in — to place a hold on her card at periodic intervals for the amounts due. If you’re in this type of situation, you should talk to the hotel’s management and see if they can change the card on file for future payments.
Considering that this is an extended-stay hotel, if you’re not sure how long you’re staying or whether your credit card has enough credit available to cover the stay’s total charge, switch to a card that has an adequate line of credit to cover your anticipated stay. Otherwise, your card issuer could charge an overdraft fee for going over your credit limit, unless you’ve opted into overdraft protection.
The bottom line
Businesses cannot legally 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, and they don’t need to notify you every time you’re charged. If you have an open-ended stay and are concerned that you don’t have adequate credit on the card you used to checked in, talk to your hotel management and switch to a different card. If you stay in hotels frequently, consider getting a co-branded hotel credit card or a travel rewards card that could at least bring down your overall hotel costs via points, miles or cash back.
FAQs
Businesses cannot legally 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, and they don't need to notify you every time you're charged.
Can a company charge my card without authorization? ›
Depends on whether the company has a written agreement stating that you have authorized the transaction that was charged. If yes, then the charge is authorized -- otherwise not.
Can I dispute a hotel charge on my credit card? ›
Keep in mind that in most cases a cardholder can file a chargeback up to 120 days after the transaction, and sometimes even longer. Types of documentation to maintain include: Reservation records. Terms and conditions at time of transaction.
Can a hotel charge my debit card without permission? ›
Your consent must be obtained before hotels charge your card. Typically, this happens when the authorization hold is placed on your card. The hotel must share its policy of what will be added on for “incidentals” such as mini-bar purchases or restaurant tabs.
What if a hotel has taken an Unauthorised payment? ›
Contact the hotel: Start by calling the hotels front desk or billing department to inquire about the unauthorized charge. Its possible that it could be a mistake or a misunderstanding. 2. Dispute the charge with your bank: Contact your bank or financial institution and report the unauthorized charge.
Can a hotel charge your card without telling you? ›
Hotel payments and policies
Hotels are considered merchants and must get a cardholder's consent before charging your card.
Can a hotel take money from my credit card without my permission? ›
Yes, a hotel can charge your credit card before you check in without your explicit consent. However, this is typically done through a pre-authorization process, which is a temporary hold on a specific amount of funds on your credit card.
How to dispute a non-refundable hotel charge? ›
But you may be on hold to customer services a few times before getting through to a member of staff who can escalate your complaint and issue you a refund. If you booked directly, ask to speak to senior management rather than the front desk. Stay calm and present your evidence firmly.
Is it illegal to falsely dispute a credit card charge? ›
What happens if you falsely dispute a credit card charge? Purposely making a false dispute is punishable by law and could lead to fines or imprisonment.
What is a chargeback at a hotel? ›
A chargeback occurs when a traveler disputes a charge with their card issuer or bank, which then triggers an investigation into the validity of the charge.
Anytime your hotel needs to collect credit card information manually, you need to send a credit card authorization form because industry standards for security prohibit staff from collecting credit card information in a non-secure way, like over the phone or via email.
Can hotels charge whatever they want? ›
However, hotels cannot just charge you whatever they want. Many jurisdictions mandate that hotels post a maximum charge in a conspicuous place (often on the back of the door). State or local law may mandate items such as a visitor fee or bed tax.
Why shouldn't you use a debit card for a hotel? ›
Imagine you use a debit card to pay for a hotel stay, for example. The hotel will likely put a hold on the full rate that's due at the end of your stay, plus additional funds for potential hidden fees and incidental charges, just in case any arise.
Can I dispute a hotel room charge? ›
If you do your investigation and submit appropriate evidence to oppose the claim, you have a good chance of winning the dispute. You should also know that your service provider will most likely impose a fee for the dispute process. You might get the fee back if you win the dispute, but not if you lose it.
Can I refuse to pay a hotel bill? ›
However, failing to pay your bill can lead to serious consequences, including eviction from the premises. Hotels have legal grounds to remove guests who refuse to settle their outstanding charges, but the process is governed by state and local laws.
Who pays for unauthorized transactions? ›
Who pays for stolen credit card purchases? You may not be responsible for fraudulent charges if you report your card as lost or stolen and follow the instructions in your bank agreement. The bank usually pays for stolen credit card purchases. Sometimes, the merchant is responsible.
What to do if your card was charged without permission? ›
A: Contact your bank immediately if you suspect unauthorized transactions on your debit card. If the transaction was made using a debit card or other electronic fund transfers, you may have additional protections under federal law.
Can a company take payment without consent? ›
This is legal under federal law, but it is not allowed under California labor laws. Instead, employers need to supply their workers with everything they need to do their jobs in California.
Can a company run your credit without authorization? ›
The bottom line
Even those who want access to your report can only ask for it if they have a legally permissible reason to do so. Both the credit reporting bureau and the person seeking access without a “permissible purpose” can be held liable if they breach the FCRA.
Can you charge a card on file without permission? ›
If your customer has authorized the card on file for future purchases, you can charge the card again without obtaining an additional authorization. However, you must abide by the terms of the agreement with your customer, such as providing a clear way to revoke authorization for card-on-file transactions.
