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Can I withhold payment on rejected credit card dispute?

You can withhold payment on a disputed amount while it is being investigated


Learn what to do if your credit card dispute has been rejected. You may be able to follow up with a ‘claims and defenses’ process.

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If you think that a charge on your credit card is inaccurate or unauthorized, or if you did not receive the goods or services you ordered, you can dispute such charges with the card issuer. In case your dispute is denied, can you then just take the matter into your own hands and not pay up the disputed amount?

That’s what reader Bonnie is pondering. She writes, “I have a charge on my credit card for services that were not satisfactory. I spoke to the merchant about it and we were unable to come to a resolution. I disputed the charge with my credit card company who came back and told me that they had found that the charge was a valid charge. I have made no payments towards this charge, at this time. I have never disputed a charge before and have an excellent credit score. I would like assistance with knowing what will happen if I just refuse to pay a dime towards this charge. Thank you in advance for your assistance.”

Check out all the answers from our credit card experts.

Ask Poonkulali a question.

After your lender denies your credit card dispute

According to the Federal Trade Commission, disputes about the quality of goods and services are better addressed under a “claims and defenses” process than under a dispute process. The FTC advises, “If you have a problem with goods or services you paid for with a credit or charge card, you can take the same legal actions against the card issuer as you can take under state law against the seller.”

The Los Angeles County Department of Consumer and Business Affairs weighs in that if the dispute is over goods and services that are “misrepresented, defective, or not delivered,” you could make use of this “claims and defenses” procedure. To put in this claim, you should write to the credit card issuer informing it that the merchant did not resolve your issue, and that you are withholding payment on the disputed amount until your issue is resolved. You could resort to this process if your claim meets some conditions:

  • The amount in dispute is more than $50
  • The seller is in the same state as you or located within 100 miles of your billing address (this condition may not apply in case of an online or telephone purchase)
  • You have already tried to address the issue with the seller
  • You have not paid the disputed amount

You should put in for “claims and defenses” with your card issuer within a year of the date of the first card statement that has the disputed charge. Send in this letter to your issuer’s address for billing errors, not the one you send in payments to, by certified mail with all your evidence. Make sure to mention that you are putting in for a “claims and defenses” procedure rather than a regular dispute.

Consequences of withholding payment

If you disagree with the result of a dispute investigation undertaken by your card issuer, you should write to the creditor within 10 days of receiving their notification to advise them that you are not going to pay the disputed amount.

The lender could then begin collection proceedings against you. If the issuer decides to report you as delinquent to a credit reporting agency, it should also indicate that you disagree with the lender and don’t think you owe the money. The lender should also inform you which credit bureaus it reported you to. And once the delinquency is resolved, it should report that matter to the same parties.

Bottom line

Bonnie, you could withhold payment on a disputed amount while the lender is investigating the dispute. After that, your credit score could be sullied if you don’t adhere to your contractual obligation to pay. And your score smooths your way in enjoying the fruits of consumerism in the American marketplace. Even some landlords and would-be employers base their decisions on your credit score.

If you meet the conditions to take advantage of the process, you should put in for “claims and defenses” with your lender. You could also make a complaint with the Consumer Financial Protection Bureau and the FTC.

Contact me at with your credit card-related questions.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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