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Dad steps in for debit-card disaster

The Baltimore Sun

All parents want to protect their children from harm and failure.

That was Alan Zulich's first instinct when his 24-year-old daughter, Elizabeth, ran into a mysterious financial mishap. It came after a three-day stay at the Fenwick Inn in Ocean City left her with a $715.38 deficit in her checking account.

Upon being told by hotel staff that the problem stemmed from a $700-plus security hold placed on her debit card account for the room, Zulich dashed off a sharply worded letter in June to the hotel's general manager to complain. Zulich cc'd me a copy in August to share his daughter's experience.

"The total Fenwick Inn bill for the weekend was $430, of which $215 was charged, at check-in, to her debit card," Zulich of Bel Air wrote. "The remainder of the bill was paid, in full, with her fiance's card. Over the next three days, the Fenwick Inn placed an additional $764.63 on her card, as a security hold.

"Bottom line - The Fenwick Inn ... not only caused my daughter $210 in NSF (nonsufficient funds) fees, and rising, but also ruined what should have been one of the happiest weekends in this young couple's lives," said Zulich, who explained that the couple got engaged that weekend.

The hotel never responded to his letter or apologized for his daughter's ordeal, Zulich said.

Young love, oddly ginormous security holds, a beach getaway, debit card rules and an angry Papa Bear. I was intrigued.

So I called the Fenwick.

Jessica Meyers, the billing administrator, said she could not recall seeing Zulich's letter. I forwarded a copy to her and asked her to look into it. Meyers was unable to find Zulich's name in the guest database.

Since I was getting nowhere fast going through a third party for info on Elizabeth's dilemma, I went to the source. Elizabeth quickly assured me that she and her fiance did not rack up all that debt on some whoopee-whirlwind spending spree.

According to her calculations, Elizabeth figured she had about $420 in her checking account before she went to the beach. On June 21, she used her MasterCard debit card to check in. On Saturday, her boyfriend of five years popped the question. Elizabeth enthusiastically said yes. On Sunday, in full bliss, the happy couple decided to stay another night.

For the trip, Elizabeth said, she brought $150 in cash. For unforeseen expenses, she had her debit card. During her stay, Elizabeth charged about $77 on her card. By the running tally in her head, Elizabeth figured she still had plenty in her account to pay for her $215 share of the room.

Elizabeth, a tenderfoot in the world of finance, was unaware of how debit cards really work.

When you use a debit card at hotels, car rental agencies and gas stations, those businesses take into account that your final transaction amount is uncertain. So merchants do a number of things to protect themselves.

First, merchants swipe your card to get an authorization code from your bank. That pre-authorization basically tells them that there are sufficient funds in your account. Second, merchants often add an extra security hold to cover incidentals, such as calls on your hotel room phone or gas for a rental car. Gas stations will often place a hold of about $75 on your card, even if you only pumped $50 worth of gas. The security hold - at Fenwick, it's an extra $40 - is returned to you if it's not needed.

The problem with using a debit card in such transactions is that once an authorization takes place, it freezes that amount in your account for a period of up to five days, depending on your bank's policy. When this is done on a credit card, it's not usually a problem unless you're too close to your limit.

Authorizations on a debit card, though, can throw off access to your cash. So even though Elizabeth was charged only $215 at check-out, the authorization placed on the card at check-in froze the cost of a two-day stay, which totaled $334.14. That meant she had about $86 left in her checking account all weekend - far less money than she thought.

Still, having only charged $77 that weekend, Elizabeth was dangerously close, but not quite over her available limit.

In the end, it wasn't an enormous security hold that tripped her up. It was human error. General Manager Greg Fleming explained that when the couple decided to stay an extra night, an employee mistakenly authorized Elizabeth's debit card for another three-night stay, which froze another $430.49 in her account.

For that, Fleming apologized, and he called Elizabeth last week to offer her a free stay at the hotel.

"We don't maliciously bang people's debit or credit cards with over-authorizations," Fleming said. "We haven't been in business for 35 years by doing something as silly as that. This really was human error, and there was a breakdown in our system. It shouldn't have taken this long to resolve this. With that said, debit cards are a real problem for businesses like ours. We do try to inform people at check-in that if they use their debit cards, it could cause them some problems."

I agree that this problem took far too long to resolve, especially since the hotel is at fault here. But I can't place all the blame on Fenwick for the delay.

By allowing her dad to take over the reins in this situation, Elizabeth did benefit from his experience. Dad talked to hotel employees by phone when Elizabeth discovered the account deficit. Listed as a joint holder on her checking account, Dad managed to talk the bank into dropping the half-dozen insufficient funds fees she was charged. Dad also did all the legwork by contacting me and writing to the hotel.

"My dad is better at handling this than I am," Elizabeth confessed.

Unfortunately, Dad's involvement probably slowed the process toward resolution. Dad is not the primary account holder in this case. He did not stay at the hotel, which meant he was not a principal part of the transaction. Worse, when he wrote his letter to the hotel, dad did not name his daughter or her fiance. There was no way the Fenwick Inn could research Elizabeth's stay at the hotel.

For security reasons, most businesses are unlikely to deal with someone who is not the primary person involved in the transaction.

"I didn't even think of that," Zulich the elder said. "She's new to this whole credit card business, so I was just trying to help. She learned it the hard way, unfortunately. After this whole mess, we went out and got her a credit card."

Zulich gets high marks for his role as Dad the Defender, but I've got a tiny message for both:

Dad, it's time to let your baby walk on her own. And because this card payment business is kind of complicated, take baby steps, Elizabeth, baby steps.

Reach Consuming Interests by e-mail at consuminginterests@ or by phone at 410-332-6151. Find an archive of Consuming Interest columns at

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