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Credit card – unable to authorize transaction – bank unhelpful – compensation for inconvenience
Mr and Mrs T travelled to Sydney for their honeymoon. When they checked into their hotel, where they had planned to stay for the week, the hotel said it was unable to process the credit card authorisation confirming that they had enough credit to pay for their accommodation. The hotel staff attempted both automated and manual transactions without success. The hotel told Mr and Mrs T that, without a credit card authorisation from their bank, they would not be able to complete their stay. The distress which Mr and Mrs T experienced was compounded by what they perceived as the unhelpfulness and unfriendliness of the hotel staff. After several days of negotiations between Mr and Mrs T, their bank in New Zealand and the hotel in Sydney, the problem was finally resolved.
The bank offered Mr and Mrs T a sum of $250 as compensation for the inconvenience caused by the problems with their card. Mr and Mrs T thought that this was insufficient, given that the problems with the card and the hotel had spoiled their honeymoon. They believed that compensation of $5,000 was more reasonable, and lodged a complaint with my office.
I accepted that Mr and Mrs T’s enjoyment of their holiday had been significantly spoiled, and that the special nature of the holiday, because it was their honeymoon, could not be replaced. In my view the distress and embarrassment they had suffered because of the difficulties with their card justified an award of compensation for inconvenience.
I found that, while the comments and attitude of the hotel staff had not helped the situation, the hotel was not principally responsible. The bank had failed to take prompt action when first advised by Mr and Mrs T of the problem they were having, and had also failed to take all necessary steps to rectify the problem. As a result Mr and Mrs T continued to suffer distress and embarrassment, not only because of the hotel’s attitude towards them, but also because, whenever they used the card to make purchases in Sydney, they were uncertain whether it would be accepted.
Therefore, what should have been a particularly happy and carefree honeymoon for Mr and Mrs T became a distressing experience. In the circumstances, I considered that an award of compensation of $2,000 was appropriate.
Both Mr and Mrs T and the bank accepted my findings, and the complaint was settled by the bank paying compensation of $2,000.