Dear Thea;
I was recently audited by one of the large credit card companies. It charged my account back $20,000 for a payment I took from a customer. The company told me I violated a specific section of my agreement with it by taking a payment via credit card from a customer for past-due balances. I tried to explain that I wasn't aware that taking a credit card payment for a past-due invoice was a violation; in fact, it was commonplace in my industry. The credit card company assured me that everyone in our business type should be following the same rules. As you can imagine, this is not going over well with my customer, who refuses to believe we cannot accept his card!

The credit card company said if it happened again and I was caught, my ability to take that card would be suspended. Have you ever heard of this?
Signed, Distraught in Detroit

Dear Distraught;
I have never heard of this, so I put the question out to one of my National Association of Credit Manager groups, hoping for an answer. Well, none of them have ever heard of it either. We did have a lot of debate on your card provider’s particular clause involving past-due payments. Does everyone have it? Is it only in specific contracts or agreements? How exactly is it worded? Everyone wondered what was in their contract, but no one knew for sure.

In other words, Dear Distraught, no one wants to join you in your canoe by drawing attention to the issue. No one wants to find themselves in your very unsavory position.

I called credit manager buddies across the country and not one of them had heard of a merchant in our industry (or any other, for that matter) being audited. Again, everyone wondered what was in their contract, but nobody has real answers. And no one has shared it with me if they did look.

Ignorance of your agreement is no excuse, but apparently we all believe it is bliss.

Then I contacted a few attorneys in the industry. They hadn't heard of the practice either but didn't sound as surprised as my credit manager cohorts. It was stated by all that the credit card agreement will vary. Whatever bank or service are you using is likely to have specific language or rules that you would have to live by.

Next. I reached out to an acquaintance I know at the afore-unmentioned credit card company. I asked her how common audits are to the merchant. She said they are "very commonplace" and that they "are random.” A special team within the company does them. We didn't speak specifically about the actual contract itself.

That's all I got: No real answers. No suggestion or input on how to address it. Just a lot of conversation, outrage, discussion, confusion, and "wow, glad that wasn't me" responses.

At this point, you appear to by the lone Mohican. Please keep me updated on how it progresses. We are all watching, from a distance, with silent support.

Help Thea as well as Distraught in Detroit find an answer. Does your credit card company permit payments for past-due invoices? Enter your comments below or write to Thea at

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