Why drivers are being 'charged £120' for petrol when filling up far less

Apr 14, 2023

Some motorists in recent days have reported being 'charged' large amounts when filling up, despite only topping up £10 or £15 worth of fuel - here's what is happening

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Drivers have been left confused by a change being introduced at petrol stations, which has seen them being seemingly massively overcharged for fuel. The new measure basically means card companies will place a temporary hold on a customer's bank account when they're using self-service pumps to make sure they have enough money in their account when filling up.

It has been introduced by American Express, Mastercard and Visa, with the change being rolled out to all UK petrol stations. Banks, card networks, and petrol stations, who have worked together on the new rule, say the change is partly to help customers keep track of their finances and to 'improve the forecourt experience.'

But in recent days, customers at Tesco service station fuel pumps have reported being charged £120 when filling up - despite only topping up £10 or £15 worth of fuel. This has led to concern about what the new measures means for our bank balances at a time when finances are tight, reported the MEN.

READ MORE: Motorists warned of £5,000 potential fine if they drive with a dog in their car

The good news is drivers are not actually charged £120, even if it may temporarily appear so on your balance or transaction. What happens is your bank temporarily reserves an amount from your available balance when you insert or tap your card at a self-service pump.

This amount can be up to £120 but individual retailers may request smaller amount. Once you've finished filling up, the pump will immediately notify your bank of how much you actually spent and your balance should then update straight away.

If you don't have £120 available in your account when refuelling, whatever you do have will be reserved - the pump will tell you how much you can spend and allow you to fill up to this amount. This process is said to be designed to protect customers by making they can't put in more fuel than they can afford.

Previously, £1 was pre-authorised, with the full amount debited later on. This meant the exact amount you spent on fuel would show up against your account balance one or two days later - making it harder to keep track of your daily spend.

But remember, this new system only affects self-service or 'pay at pump' transactions. So if you pay inside at the kiosk, you still just be charged for what you put in as normal.

The unused 'reserved' funds are never actually taken out of your account - it just temporarily comes off your available balance. It should update within minutes, though some drivers have reported waiting several days.

It can take the bank longer to release the funds back into your account in a very small number of cases. If you experience a delay, you should contact your bank directly.

If your available balance is lower than it should be because reserved funds are taking too long to be returned, and you urgently need to spend them, MoneySavingExpert advises:

A Tesco spokesperson said: "The funds that are reserved whilst a customer refuels at Pay at Pump should be immediately released back into the customer's account. If this has not happened, we would recommend that the customer contacts their card issuer to resolve the issue."

A Mastercard spokesperson said: "Banks, card networks, and petrol stations have worked together to update and improve the way payments are made at 'Pay At Pump' sites. Although customers may notice in their banking apps an initial transaction for a higher 'pre-authorised' amount, this is temporary.

"Once the sale is made, the exact value of fuel dispensed will be charged and any remainder of the pre-authorised amount is released for use almost immediately. If cardholders experience any issues they should contact their bank."

A Visa statement reads: "Our innovative payments solution means you can make a quick pit stop to fill up your vehicle without entering the shop and keep control of your budget at the same time.

"In the past, when you used a self-service pump to buy fuel, the exact cost would only show up against your account balance one or two days after you filled up. This could make it hard to track your daily spend.

"Soon, the way you pay for fuel at self-service pumps will change. When you insert or tap your card at a self-service pump, your bank will temporarily reserve an amount from your available balance while you fill up.

"This could be up to £120. But not to worry, once you’ve finished filling up, this will be updated to your bank and you’ll only be charged for the amount you’ve spent."