Warning: Banks putting undisclosed “holds” on ATM withdrawals

Automatic teller machine withdrawals are subject to all kinds of fees, to the point where Washington is getting involved. But new laws won’t protect you from ATM mischief when you’re overseas.

Longtime reader Steve Loucks, who works for the travel agency consortium Travel Leaders, just returned from London, where he found a shocker on his bill:

I used my ATM card twice, once through a Lloyds Bank and then through NatWest. Both times, I discovered today, each financial institution not only took out the amount I requested but they also placed a hold on my account for those same amounts (the latter hold doesn’t expire until tomorrow).

The red flag came today when I realized my bank had covered me for being overdrawn (fortunately, I have overdraft protection).

Have you ever heard about this happening before, and if so, why a bank would be allowed to double dip? For any unsuspecting traveler, it could wreak havoc on their banking accounts.

No, I haven’t heard of this happening. I’ve contacted both NatWest and Lloyds to get a comment. In the meantime, a search of their sites show no meaningful disclosure of the “hold” policy.

Hotel and car rental companies routinely place a “hold” against your stay, just in case you damage a car or destroy a room. But I can’t think of a good reason why a bank would do it for an ATM withdrawal.

Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org. Read more of Christopher's articles here.

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