New Zealand couple stuck with $7.7k Miami bar tab bill after handing over credit card

A Kiwi couple has been forced to foot the bill for items ordered on a bar tab that they didn't authorise. Photo / 123rf

A fun day out turned into an expensive one for a holidaying New Zealand couple who were overcharged US$4500 ($7792) on their credit card at a Miami club.

The couple, who are not identified, were staying in Miami with a few friends when they booked a table at a day club, which required them to spend a minimum of US$3000 ($5194).

The couple had handed their non-bank credit card to the bar for a drinks tab and claimed to have ordered around US$1700 ($2943) in food and drinks for their guests.

Expecting a bill of US$3000 to match what they had ordered, the couple discovered days later the club had charged them US$7500 ($12,987).

After the pair were unable to get an itemised bill from the club, they applied for a chargeback from their card provider.

The provider reversed the transaction until the club produced signed receipts and evidence that the card was present, prompting the issuer to charge the full amount to the couple’s account.

The couple claimed the signatures on the receipts were not theirs and they had been charged for items they didn’t authorise.

The matter was taken to the Financial Services Complaints Ltd (FSCL) – a Financial Ombudsman service – who reviewed the case and the credit card terms and conditions.

The FSCL found that by allowing staff to hold the couple’s card behind the bar for hours, the couple had unintentionally breached the card provider’s terms and conditions.

Because of this breach, the card provider was entitled to charge them the full amount of US$7500.

The incident has promoted a warning from Financial Ombudsman Susan Taylor ahead of the festive season.

“It might feel normal to let a venue ‘babysit’ your card to keep a tab running, but that convenience can come at a high price.

“If you hand your card over and walk away, you are risking someone using your card and charging items to it without your knowledge.”

Taylor said keeping your credit card in your hands is the simplest way to prevent unauthorised charges.

“Your credit card is effectively a direct line to your money. You’re responsible for all the charges, even those made without your authority, if you’ve breached the terms and conditions,” she said.