Hotel, double charges, overdraft and bank interest

Question

Situation:

During check-in at a hotel, I give them my (debit) card, do paperwork (fill in forms, sign documents and so on...). They hold some funds ($100 for example). Finally, during check-out, something goes wrong and they tell me, they are unable to transfer held money to their account. I leave the hotel.

Shortly after I arrive at home, I receive notifications from my bank, that the hotel wrote off 2x amount of money ($200) (hopefully by mistake). But I had just $100 on my account, so now I have $-100.

Since I have overdraft, my bank starts to charge interest.

Retroactive Questions:

1. What makes hotel's card transfers legitimate? How exactly do I give them permissions during check-in to use my card? What they can do with it? Can they do what they want to do, and then just say - "it was a mistake"?
2. Is it possible to restrict them in amount and/or number of transactions they are allowed to do with my card?
3. Who should pay interest to my bank? Overdraft has occurred due to their fault. Is it possible to make them pay interest?

Proactive Questions:

What conclusions do I need to make? What exactly do I have to alter to avoid all these troubles in future?

P.S. Such situations are not uncommon

Answer 1

First of all, this does not sound like a debit situation. Every debit has to be authorized by the entry of a pin code. So, the hotel could not have arbitrarily created a new debit charge.

Usually, hotel charges are credit charges. Once they have your credit card number, they can charge anything they want to the credit card.

If it is an accidental double charge, you can call the hotel and ask them to refund $100 or whatever the mistake was plus your overdraft fee. In all probability they will refund any double charge, but not agree to refund the fee.

You can also contest the charge and do a "chargeback" of the amount which was double charged.

You will probably not be able to collect the overdraft fee that you got from the hotel unless you sue them in small claims court, or you luck out and the hotel agrees to refund the fee as well.