I owe PayPal $5500 What will they do?

I have been in a similar situation and I will say that PayPal will freeze your account and send you to a collection agency. I was able to pay back the money I owed them and I a also in the US. I would think that on the Canadian side it would be similar to the US.

 

What? Collection agency. Would PP go to such an extend which is deemed as immoral?

 

Debt collectors on behalf of Paypal is common. Questioning morality for lending/bank, much less international e-commerce business is not necessary. We all know where this thread will go if follow that rabbit hole.

 

This is very common occurrence actually if you have negative balance. Would love to hear back from the OP to see how this played out, hopefully contacted PayPal who was willing to work with him otherwise the ability to work with the collectors.

 

good thread. not really what sure what PayPal could do. I would check their terms of use and other documents. I did have a friend who did a bunch of Canadian scams through PayPal though. Probably the first 30 times he did it he was never caught, but later down the line he had police investigate him for it. Overall he got away with just community service and a criminal record. Throughout this time he must have scammed close to 80-100gs. However, your situation is quite different. I think if you declare Bankrupt here in Canada there is not too much they can do, but not 100% on this.

 

For bigger amounts probably Paypal has some warranty funds because it's possible to have this type of problems often. So what they could do? Yes hire debt collectors but again costs could be higher than 5,500 CAD or not. So I am skeptic myself here too. If the amount would've been 500-1000 probably you could've stay chill. Just call them and ask what is the situation.

 

if it was india, paypal was never get any money from me..

 

Paypal will send it to a collection agency and due to the terms/ conditions that are going into place effective this upcoming summer, you may never be able to get another account ( unless you have a business account, even then that might be tricky using your info).

Reason they send it to a collection agency:
Paypal could go through the process of waiting for you to pay it back in increments but they dont' want to deal with the headache. A collection agency will atleast purchase the debt for pennies on the dollar, allowing Paypal to just close the account without another thought to the whole matter. But if it gets to that point, you would already gotten past the point of them sending you to their collections department and added your name to a list of users who need to speak with the fraud department even after you settle your debt.


Next course of action:

- Call - Speak to a customer care representative and discuss the possible reason for the amount. If it is something that you can launch an investigation over, that will give you about 90 days to prove it was done incorrectly or gives you time to come up with a chunck of the funds.

- Colleciton - Allow the debt to go to the collection agency and deal with setting up a payment arrangement. The only problem with this option is you will not be able to open your account again until you have paid off the full debt.


Paypal has easily become one of the main sources of banking online so you may want to settle this asap. If you need more help or need step by step help with remeding this just pm me.

 

If its a business account just file for bankruptcy to avoid the jail time man

 

For that amount of money, you WILL end up having a debtor/collection agency coming after you on behalf of PayPal. I once upon a time had a -$350 balance on a business account for ~2 weeks on an account that regularly receives huge sums of money every month. The amount was sent to collection within that two weeks period, this happened in a single calendar month. (note: also Canadian)

In our case we had the money and paid up on the initial reach out, that said, I'm quite certain that it's a computer that does this automatically, there is no logical reason a person would have handed the debt to a collection agency (paying X rate to the agency) on such a small sum given how much money moves through our account each month.

Oh I should have also mentioned, I'm pretty sure in Canadian law, for debts larger than $5,000 they can file a lean on your bank account / income fairly easily these days.

And to further answer your question, typically, yes, if they can get away with doing so, they will charge you interest. That said, depending on your situation, you can just avoid it all together and likely, nothing will ever happen. Most companies will not go through the trouble of legal.

If you "do nothing" it will likely be ~3 years before the collection agency writes the debt off as "bad debt / noncollectable" , which will further HEAVILY negatively impact your credit rating for ~7 years.
If you "pay it back" you can often times , if you leave a debt non-collectable for an extended period (aka saving up), later offer said agency something like $0.40 on the dollar and pay out the amount in a lump/one-time sum. This is what all those debt management companies do that you see on TV/radio.

 

I am wondering why this ancient thread has been brought back to life.
@op, seeing as this is old, I would like to know the final outcome. How did you resolve it?


Some countries do have solutions where you can come to a deal with creditors to resolve them. Simply ignoring a problem wont make it go away. If you take steps to actively reduce your debt, and "lenders" can see their money to start returning, then they will be more likely to work with you, rather then taking dramatic actions which will make you lose control completely. For me, if I was in this situation, I would be saying to paypal, give me 14 days to get a personal loan from the bank, and blah blah blah. That is likely a better solution then hiding and pretending the problem doesnt exist.

For others reading this thread,
Here if you have alot of bad debt, you can wipe it off by declaring yourself bankrupt. Small to medium debt, there are services where they can negotiate a deal where the lender gives you interest free while you make repayments, and sometimes they can even renegotiate just how much you owe. The lender takes a smaller hit then if you went bankrupt, but at least they can start getting some of their funds back. I am not sure if these are options available in the US, Canada or others.

For me personally, I have had alot of debt in the past. Didnt ignore it, got out of it by taking a nice personal loan, keep spending to an absolute minimum, and paid it off years ahead of schedule.

 

when i am replying any post i am not checking how old post is, i replying because i find that post on top of the list.. and i find interesting i reply or comment on it.

 

ok i will from next time

thanks

 

And that is why India and other 3rd world countries have so much trouble opening Adsense and other types of financial accounts, because people like you love to scam them and not pay what you owe.

 

Frankly its all around the world, what you are talking about 3rd world countries, and I guess this trend of not paying your dues and what you owe, must have started from western countries itself. Be it paypal, online payments or credit cards, every country have such frauds and strict rules, it depends on the individual how to handle it.

 

Well that was for him to have a taste of what it feels when someone talks like that.
Well if deal locally then we have our own payment processors, where people deal with online payments, I guess it should be there in India too. Only if we have to deal with people globally, we use paypal, anyways paypal charges too much as compared to the local payment processors, when it come to withdrawal.