How to Withhold Payment on a Credit Card: Legal Guide CR-7Printer Friendly Version

August 2009

A federal “withholding law” may be of help to you if you used your credit card to purchase home appliances, a home study course, or some other consumer product or service, and things don’t turn out as you had a right to expect. Assume –

Example 1: Your new appliance arrives with scratches and dents. You try to return it; but the seller won’t take it back or replace it.

Example 2: You ordered a book or CD by telephone, mail, or over the Internet, but after 30 days, it hasn’t arrived. You ask the seller to send it or refund your money. The seller ignores your phone calls and letters.

Example 3: You were called by a telemarketer, and you decided not to purchase anything, but you made the mistake of giving the caller your credit card number. A week later, a package arrives at your home. The person who called you insists that you ordered it. Despite your calls and letters, the telemarketer won’t take it back or reverse the charges to your credit card account.

Example 4: You purchased a week’s vacation on a cruise ship, but the company went out of business and has refused to return your advance payment.

In all of these situations, you may have a right to withhold payment from the issuer of your credit card. Federal law gives credit card holders a right to withhold payment in each of these situations and others.

But to use this right you must act quickly.