Consumer complaint received 2016-03-15
Company: U.S. BANCORP
State: AZ
Product: Prepaid card
Sub-product: Government benefit payment card
Issue: Unauthorized transactions/trans. issues

Complaint:
I have a prepaid debit card issued by US bank as a vehicle to receive child support payments from the State XXXX. Recently US bank instituted a policy that changes the requested authorization holds at gas stations from the requested {$1.00} 3 day hold to a {$75.00} 10 day hold. The reality is that most merchants batch their credit card transactions daily, authorization holds should not last more than the requested 3 days. I recently visited a gas station to purchase gasoline with my US Bank issued prepaid card, and there was an issue with the pump which caused the transaction to time out without allowing me to purchase gas. I tried a second time and was only allowed to purchase {$9.00} of gasoline, although I had {$84.00} available before I began trying to purchase gas. Confused about what was happening, I contacted US Bank on the phone number on the back of my card. I was greeted by a representative that informed me that it is the policy of US bank to place a {$75.00} hold on child support funds issued on my card for 10 days anytime I purchase gasoline with the card. I informed the representative that I was not able to complete the first purchase as the machine had timed out so no purchase actually occurred. I asked her what I needed to do to get the {$75.00} authorization released so I could purchase groceries with the remaining funds as I planned to do. She casually told me that it was impossible to have the inaccurate {$75.00} hold released that was placed in error with the gas pump timed out and that I needed to wait 10 day for US bank to release the funds back to me to be used for the purpose intended ( child support ). I asked to speak to a supervisor and I was transferred to a person who identified herself as XXXX XXXX. She casually and callously told me that I should have read my disclosures and that even though a gas purchase did n't actually happen, since I entered my card into the gas station pump, I am subject to the {$75.00} hold for 10 days. I explained to her that the gas pump had an error and did n't provide me with gas, so purchase was actually completed, and I was told that was my problem and that it was impossible for the hold to be removed by US Bank. I find it incredibly concerning that a company as reputable as US Bank would make a decision to do this to people who depend on these child support funds to care for their children. First of all a {$75.00} hold is excessive in the first place, and for many families like mine, that is the amount of money spent buying groceries for a week. A purchase of gasoline, which cost less that {$25.00} should not warrant a {$75.00} hold. Secondly a hold of any amount for a period of 10 days is incredibly excessive. When errors like this occur, US bank is taking food from the mouths of children for almost 2 weeks due to a computer error that cardholders did not cause. It is already unfair enough that a financial institution, is allowed to hold these funds and not be required to pay interest but to not be held to the same rules as bank accounts, which are required to release holds within a reasonable amount of time, is simply unconscionable. This needs to be investigated as it is absolutely unfair to card holders. I did not cause the error at the gas pump and I am being punished as a card holder by US Bank for this problem. Not being able to purchase groceries for 10 days is simply unfair. US Bank should be held accountable and made to revisit this policy that renders card holders helpless in these situations, with excessive hold amounts for excessive time frames.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with monetary relief