merchant processing credit card company closed my merchant account holding funds for 6 months?

With this kind of a problem, if the amount of funds is a considerable amount, you really should contact a Lawyer.
I would let them know you are going to have your legal department ( your lawyer) be in touch with them if they do not release your funds in 30days or less.
Unless you have a contract that states the funds will be held for this amount of time,ect.. If you do have a contract- then you have to honor it or call your lawyer.

You will need to get a lawyer.

The credit card companies can do this if they have information that you were misusing the credit card account, for instance allowing teenagers to use their parents credit cards, or misrepresenting transactions, for instance designating a cc transaction as being on premises, as opposed to online, or using cc to finance illegal or controlled transactions (drugs, gambling, sales to underaged, etc).

If that is the case, normally their merchant users agreement with you stipulates that they can hold the funds that long to protect themselves against possible fraud claims made against your account by customers or the government.

Again, get a lawyer.

What reason did they give you? And, yes, they did provide a reason.

Funds being held are a perfectly legal and within the right of your processing company. f you read your contract you will find the clause. Chanes are you exceed your processing volume or average transaction amount for your business or your product is considered prohibited. Call your processor and tell them to refund the funds to the cardholder instead. They can, and will, do this to remedy the situation. After that, secure another form of payment or find a processor that has more flexibilty on transaction amounts and monthly volumes.