On December 15th 2020 at 11.59pm, Paypal will introduce a new annual charge for inactive accounts.
How Much Is The Charge?
The annual charge is £9.00.
If you have a balance less than £9.00 sitting in your account, they will take it all.
For example if you have a balance of £7.60, they will take £7.60.
If you are sitting with a balance of £109.00, they will take £9.00. This charge will be repeated every year until your account is empty.
If you have zero balance, no charge is due. However it’s worth remembering that this charge will be applied at a later date if you do receive funds and forget about it.
What Is Considered An Inactive Account?
If you haven’t made a transaction in the last 12 months, Paypal will consider the account inactive and automatically impose the charge.
How To Avoid This Charge
Here are a few simple steps to take to avoid this charge.
• Close your account.
Transfer any remaining balance out of your account and close it. Look for Account Options and once you have transferred your money out, opt for “Close Account”. At the time of writing this article, there is no option in the PayPal App to close the account, therefore this must be done by logging in via a web browser.
• Leave Account Open But Remove Balance.
Transfer all money out of the account before the deadline and leave the account open. By transferring the money out, this will actually register it as an active account. If doing this, remember to repeat some kind of transaction every 12 months.
• Make A Transaction.
Time is fast running out for this option, but if you are reading this before the 16th Dec 2020 deadline, you could buy something using PayPal. This will trigger the account as active.
Who Will This Affect?
There are thousands, maybe millions of PayPal users who only use the service once in a while. Maybe you opened an account years ago and still use it as and when needed on the odd occasion that you buy something from eBay or another site that uses the PayPal gateway.
This charge is for inactive accounts only. It is important to underline that active accounts that have made a transaction in the past 12 months are not due to pay this.
If you are locked out of an old account. Perhaps you have changed your email address or mobile number since you signed up to Paypal 10, 15 years or so ago, you can call customer services on 020 3901 7000.
Why Don’t You Know About This?
PayPal have emailed you about this. The reason you haven’t opened the email is perhaps the fact that many of us have been receiving bogus emails from scammers for years. Telling us to “click here to login or charges will be applied to your PayPal Account”.
We ignore them. We discard them. But for once the email that you received 60 days and again 30 days prior to the introduction of these charges, for once this was genuinely from PayPal.
Why Are PayPal Introducing This Charge?
The Reasons & Morals Of This Move
Many see this as a controversial move by PayPal. But the service costs money to operate. We can only imagine that there are millions of dollars / pounds sitting in inactive accounts.
Maybe the users have got locked out of their account. By having changed their mobile number or email address since they first set it up.
This allows PayPal to legally chip away at these funds by dipping £9 per year until the balance has been completely snapped up and the account emptied out.
We can also imagine that other online services, such as email providers have a similar policy of deleting accounts that have sat inactive for a long period of time. The difference is, PayPal is an online bank. If they just closed inactive accounts and kept the money, this might “raise a few more eyebrows”.
Just A Thought
Here’s a thought. PayPal became eBay’s banking system in 2002. Over the last 18 years you wonder how many account holders are deceased, therefore the money is just sitting there without anyone realising. PayPal have suddenly opened up a perfectly legal way to get their hands on these funds.
On the defence of PayPal, without being able to access this dormant money, they would never know what the bank balance and value really is.
We have of course taken a very simplistic view on this. There are most probably costs and complications involved in keeping accounts open that contain funds but will never be used again.
Happy Christmas PayPal
That’s a nice little bonus every year on the 15th of December, for as long as it takes to clear out these accounts.