my old company stuck me with a business travel bill after I left

A reader writes:

During the first week of May, I was sent by my former employer to one of our client sites out of town. Before traveling, I was told that my employer would pay for the hotel room but I would have to pay up front for parking since the hotel was downtown. I checked into the hotel and they asked for my credit card to use for the valet parking. Everything went fine, and when checking out they stated to me again that my company would be billed for the room.

After returning home, I received a job offer from another company and decided to accept the offer. I turned in my resignation and left my old employer on June 1. However, on July 6, I checked my bank account and noticed a massive hold in the amount of my entire stay from the hotel I stayed in while during that business trip back in May.

I called the hotel to ask for the reason of the transaction and the account department told me my previous employer rejected the bill and informed the hotel that I have to pay. Now because of this, my bank account is severely negative and I have many non-sufficient funds fees. I have several payments for bills that are now being denied because of this and my bank won’t do anything about this.

I can’t reach anyone at my previous employer since it is the weekend, but have you ever heard of anything like this happening?

It’s entirely possible that your former company is trying to screw you over in an incredibly unethical (and probably illegal) way, but it’s just as likely that this is an innocent mistake that will be taken care of as soon as you contact them. The hotel’s wording to you was inflammatory (“rejected the bill and informed the hotel that I have to pay”), but that might not be exactly how it transpired, so give your old employer the benefit of assuming they wouldn’t be so flagrantly dishonest until you know differently.

If it is indeed an innocent mistake that can be quickly fixed but you approach them with the assumption that they’re trying to make you shoulder their business travel costs, you could end up burning a bridge that didn’t need to be burnt.

So the first thing to do is to contact your previous employer. Contact your old manager and the accounting department, say you’ve just discovered this mistake, and ask how to get it straightened out.

Once you talk to them, if it doesn’t get fixed, then get a lawyer involved. A letter from a lawyer can often solve this sort of thing pretty quickly, without having to take it any further than that.

(And in the meantime, you might contest the charge with your credit card company, if indeed you never authorized the charge.)

By the way, if it does turn out that your employer did this intentionally, it wouldn’t hurt to tip off any friends you have still working there. People need to know when they’re dealing with an employer like this so they can take appropriate steps to protect themselves.

{ 50 comments… read them below }

  1. Anonymous

    Does the OP have anything in writing regarding the employer being responsible for the payment of the hotel? If not, I don’t know how s/he can prove that the company indeed said it would.

    1. Emily

      It also seems to be that if the employer was prepared to lie in court about it, and it was his word vs theirs, a judge/mediator would probably find it more likely that employees are not required to pay for their own hotel on business trips. It’d probably also be quite easy to investigate the company’s standard procedures – either requesting pay records to look for reimbursements, or asking testimony from other employees – and see that they typically cover hotels and it would have been highly unusual for them to make the employee pay.

    2. Anonymous

      The only reason I say this is based on my experience with my company and (in general) people. My company used to reimburse for stuff, but now since its bankruptcy, it might change its tune. Before I do something that requires the shelling out of money, I try to get word from someone up above that it will be reimbursed, and right now, I’m not getting a straightforward answer. But even before its bankruptcy, straightforward answers weren’t exactly the norm either. Therefore, with anything these days, I want things in writing.

  2. Anonymous

    It sounds like the OP must have used a debit card rather than a credit card. Otherwise, there wouldn’t be issues with insufficient funds, etc. Unfortunately, that likely means that he/she has little recourse from the bank, as debit cards usually don’t have the same protections as credit cards. I’d hightail it to a lawyer.

    1. Natalie

      A lot of banks offer similar protections on debit cards (as a courtesy). OP may want to contact his/her bank and find out.

  3. EngineerGirl

    I was thinking that too. The bank account wouldn’t be frozen over a credit card.

    It is possible that when the OP resigned the old place closed his account. My big concern is that companies can take thier own sweet time paying bills. I would ask for cash to settle up.

    Another issue is if the old company is having cash flow problems?

    1. Shane

      Debit Cards require a PIN number to authorise so I don’t know how the hotel could have charged it without her knowledge. I have heard of some Dredit/Debit hybrids or credit cards tied to bank accounts but we really don’t know what kind of setup she has here.

      1. Ariancita

        Almost all debit cards in the U.S. function like credit cards (except the money comes directly from your bank account) and no PIN is required. They have a Visa or Mastercard logo on them. In fact, I can’t remember the last time I’ve seen a debit card with no Visa/Mastercard logo…. years and years ago.

        1. Shane

          ah I did not know there was such a difference. I am in Canada where a PIN is required for all debit transactions (and credit transactions are also moving in this direction now that many cards are chipped)

      2. The Other Dawn

        It’s likely a debit card with a Visa or Mastercard logo, which does not require a PIN number. You use it like a credit card. Since no actual charge has come through the checking account, only a hold on the balance, there’s nothing the bank can do. This is something OP has to fix with the former employer. Even if a charge did come through, OP will still have to make every effort to clear it up with the former employer first.

  4. Anonymous

    Too bad the reply doesn’t even get into the real issue here. In my experience, there are no quick fixes at this point. Even if this was a mistake, or if a letter from a lawyer convinces them to pay the hotel bill, this person is still screwed. Their good standing with their bank and anyone who’s bill they couldn’t pay on time is adding fees and penalties…. This company isn’t going to assume responsibility for any of that chain reaction they started. The reader needs to get a lawyer involved fast.

    1. Shane

      Depending on how the OP handled this payment contesting the charge through the bank shouldn’t result in any negative effects on the Op’s credit standing.

      1. Ariancita

        She has bill payments that are being denied because of all the overdraft fees from the hold. Those unpaid bills can indeed negatively affect her credit rating if it is reported. Plus, all those unpaid bills will start charging late fees too.

        OP: contact all the bills you are unable to pay right now and let them know you are going to pay them. Communication can help prevent them from reporting to your credit report and maybe even alleviate any late fees.

  5. Jojo

    At previous companies I worked for, it’s kinda normal for the employees to pay with their personal credit cards for hotel bills, rental car etc., then expense it to the company and get reimbursed.
    But we normally use credit card instead of debit card so you can pay it early enough as soon as you get reimbursed.
    Is this probably the case? How did it work with previous business travels? What’s the travel policy? Should be easy enough to find out with one phone call.
    For future, it’s always safer to use a credit card instead of debit card especially for these kind of things.

  6. Jess

    Ugh. If it did turn out to be a mistake on your company’s part, ask them to pay for your overdraw/late fees. This is a different (and more blatantly illegal) situation, but once I had a coworker who was accidentally not paid one month at a university where we were paid monthly. She had switched funding sources from one grant to another, and the financial person who was supposed to update the payroll system with her new situation did not. She had bills autopaid from her bank account, and ended up with a bunch of payments that didn’t go through and fees because she wasn’t paid when she was supposed to be. She was able to get the university to pay her fees. So it doesn’t hurt to ask!

  7. Eric

    Life lesson. Credit over debit cards for certain situations. Anything involving a hotel room deposit, or something you won’t know the final tally, or where you expect to be reimbursed qualifies.

        1. JT

          Way safer than debit card. We have plenty of money in our bank, but use a credit card for many transactions because it gives us a lot of protections. We pay it off in full always.

          Debit cards are a very risky tool – avoid them if you can.

          1. Jojo

            +1 to JT’s comment.
            I don’t quite understand why people opt for debit card iso of credit card either. If you are financially responsible, credit card is definitely a great way to go. I get many free airline tix as well as hotel rooms from using my credit card points. I always pay in full, of course.

  8. TychaBrahe

    It could also be a mistake on the hotel’s part.

    I once was staying at a hotel with my mother and I was to arrive before she did. She told me that she would pay for the room, but that I should use my credit card to check in. I did. She arrived later and put her credit card down.

    And then both of us were charged.

    1. Ariancita

      Yes, hotels are notorious for this: multiple charging. We hosted a symposium and the hotel charged 3x for a few people’s room.

      1. KayDay

        The same thing happened to me at a wedding–I was charged 5 times for the room! Fortunately, it was all resolved after 2 days with only 1 call to the hotel (during which they said it was my banks fault. I still have no idea whose fault it was).

        1. Ariancita

          Hotels do this all the time. I think they do it on purpose to see who notices and who doesn’t. It’s definitely not your bank.

    2. Elizabeth West

      Not only that, but hotels are notorious for putting big holds on debit cards. So far I haven’t had that happen, but it does. It might have been that because the OP paid for parking and the hotel was supposed to be billed for the room, that some fumblefingers employee put it on the card number that was in the system instead.

      OP needs to call former job and let them know. Also call creditors and tell them what happened, and that the bills will be paid as soon as possible. If former job doesn’t budge, get a lawyer pronto.

  9. AD

    Why did it take the hotel over a month to bill the company? The whole timeline seems a bit fishy here, and it seems like the hotel may actually be the one that dropped the ball, not the company.

    1. Emily

      Unless the hotel did bill the company immediately after the stay and the company dilly-dallied and ultimately really did opt to deny the outstanding charges. I can see that taking a month to wend its way from office to office to office.

  10. Student

    Never put anything on a card that you can’t actually afford. Don’t put something on your debit card if it will result in an overdraw. Don’t put something on your credit card if it’ll put you over the limit.

    Even in situations where the company is entirely above-the-board and honorable, mistakes happen. Delays occur. If you can’t afford to cover it and you have to hand over a card, then it’s time to do one of two things: (1) Get a company credit card (2) Get a job with a more affordable financial liability. Corollary (2b) is to book hotels you can afford yourself instead of the fanciest hotel in town on the company’s dime.

    While this is most likely illegal, I doubt you’ll be able to recover the cost. I’ll guesstimate that this is $700 to $1400 worth of charges for a week’s long hotel stay. You can probably try small claims court (look up your state’s rules on it!). However, if a lawyer gets involved, then you’re going to be out of luck. Unsolicited personal financial advice – try to save up enough money in a bank account to cover financial emergencies like this – there are a lot of things in the $1K to $2K range that occasionally go wrong in life.

    1. AD

      (3) Get a credit card so that you don’t have holds on your actual bank account. It’s well-known that you shouldn’t use debit for hotels, rental cars, etc., because they can freeze money “just in case”.

    2. Stells

      Corrections to your statement:

      (1) get a credit card for company expenses. Very few companies issue “company credit cards” unless you’re the AP person approving charges

      (2) I don’t even know what you mean by this, so I’m just going to skip it

      (2b) Most of the time employees don’t get a choice in where they stay on the company’s dime. The company books all the info, and you show up when and where they tell you to. Employees are required to put a personal card on file for incidentals (in case you order room service or a PPV movie)

      Also, the OP never said they didn’t have savings to cover it, just that by the time they noticed the charge the bank had rejected some of her bill payments and that there were a huge number of insufficent funds fees.

      1. Kelly O

        I’d disagree with a few of your statements. Until fairly recently I had a corporate credit card for covering expenses related to my work (I kept my card until they were certain the front desk/office person was going to work out.)

        Our employees book their own rooms and are aware of our corporate limits on how much they can spend per night. When we open a new location we get a block of rooms and handle those at a corporate level, but for smaller trips the employee does it himself with the corporate card.

    3. Anonymous

      Thank you for taking time to inform us. I know you must be busy drafting your plan to fix the U.S. economy (make more money, spend less). Please don’t let us keep you any longer.

    4. Emily

      Don’t put something on your debit card if it will result in an overdraw.
      Whether or not she had the funds in her account to cover it, the employee didn’t expect to be billed for the hotel room. She intended to pay for valet parking—a considerably smaller expense. It sounds like the hotel basically told her, “Your old company wouldn’t pay the bill; lucky for us, we had your card handy from when you parked your car, so we went ahead and charged the amount to you!”

  11. The IT Manager

    Perhpas your old company did have something to do with it, but it sounds like you never authorized the hotel to bill your credit card for the hotel room and they did after the fact. Did you put it on your card expecting the company to pay before you were charged? Or did the hotel just charge your card a month later becuase they happened to have the number from the valet bill?

    It seems to me the hotel may have done something wrong here (perhaps in error and not maliciously) and not necessarily your old employer. Like Alison said, it’s best to talk to them nicely and ask why you’re being billed for something they should have paid.

    1. Anonymous

      I had something similar happen with business travel – I put down my personal card for incidentals and my entire stay was charged to my card, even though the room was supposed to be paid for by my company’s credit card. It was the hotel’s fault, just a mix-up. Thankfully I had put it on my credit card and my accounting department resolved it in a few days, so it was just on paper. I know not everyone has a credit card but personally I would never put reimbursables over $100 on my debit card. Too much room for error!

      1. Kelly O

        See, I think this is what may have happened. The hotel billed the wrong room, or someone made an error using the company’s card in the billing office and they “just used the other card” rather than try again (or someone transposed a number somewhere, who knows?)

        I guess I wouldn’t get too bent out of shape about it until I talked to someone at the old company. And I do get the whole “I used my debit card and now bills are bouncing” but if you call the bank/credit card people and your company and let them know the urgency they may be quite helpful.

        It’s not necessarily work-related, but a few years ago my husband’s debit card number was apparently one in a bunch that were taken from an online retailer. He found two $800 charges on his online statement and immediately called the bank and the company listed to dispute the charges. There was paperwork involved of course, but his account was fixed in less than four working days. Now, that may have been the exception rather than the rule, and it took a lot of legwork on his part, but things can work out.

  12. lisa

    most likely she signed something saying she was responsible for the hotel bill if the company didnt pay

  13. Eunice

    I would contact lawyers right away. Even with unauthorized charges, when disputes occur, the CC company will attempt to get funds back from hotel. The hotel *Most Likely* has OP’s signature along with last 4 of card on the same page, which would prove that OP knew that card was being used for hotel, which would mean a denied dispute with CC company. Go to lawyer ASAP!

  14. Sparky629

    One possibility…
    The hotel submitted the bill to the employer and because it was a month later, the employer probably denied the claim. In reality, she didn’t work there anymore so why would they pay for her hotel (they probably did not look at the hotel stay dates). Also, since they denied the initial claim OP should ask for reimbursement of bank/overdraft fees from the former employer.

    But do EXACTLY what AAM suggested to take care of the situation.

  15. Employment lawyer

    Well, that’s probably illegal.

    I’d make ONE quick call to them right now:

    “I’m not angry, because I assume this was a mistake. I’ve suffered a lot of damage from this, though, and I think it’s fair to ask you to fix this since it was your fault. I’d like you to wire me money on an emergency basis (or whatever) to fix it.

    Unfortunately, this is continuing to cause me a lot of problems. I need to get something in writing, pretty much right now, acknowledging that you’ll take care of rectifying this error. I hate to ask you to act on an emergency basis, but your mistake has made that necessary.

  16. Anonymous

    While not necessarily the policy at every hotel, but all the hotel’s I’ve worked in have a disclaimer on the registration card when you sign in that essentially says they have the right to hold you liable for any charges not covered by alternative billing.

    My guess is that the hotel billed the company card in due time, and when the company received the statement a month later, accounting saw that the employee in question is no longer employed and disputed the charge. The hotel then turned around and charged back the other card on file (the guest’s), to be discovered a month after that, depending on the billing cycles.

    And no, hotels do not routinely process extra charges just to “see who notices”. This is illegal, and cheating customers is poor business practice. Mistakes happen, but stealing gets you prosecuted.

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