PayPal Negative Balance and Debt

JohnSmith321

I spoke with Paypal yesterday, they can't set up a repayment plan but told me to pay as much as i can frequently ( told them it's not possible for me to pay the whole balance at once ), not sure if that will avoid them passing the negative balance to a DCA, but made a payment of £200. 

Freddo5p

My apologies for 'resurrecting' the thread (and not replying for a while). Since I keep occasionally getting private messages regarding this issue, I wanted to provide an update. 

It has been almost four years (the incident took place in June 2021) since my original post, and I have not been contacted by anyone regarding the alleged debt. No letters, no emails, no phone calls. My address, email address, phone number, and names ( ) are still the same.

sourcrates

Not all debts get chased, that`s the only reasonable explanation I can give you, you may find the debt will be sold prior to it becoming statute barred, and that new owner may be aware of the debts status, and pressure you for payment possibly with the threat of impending legal action.

On the other hand all may stay quiet, and it will go statute barred 6 years after the date of default.

Recent FCA regulation, and the change to PayPal UK Ltd, has seen some bad debt accounts sold, and had legal action pursued by there new owner, but what policy PayPal pursue is still relatively unknown.

Freddo5p

I see. It seems that the change to PayPal UK Ltd took place two years ago, and you've mentioned that recent FCA regulations are from last year. 

Could you tell me a bit more about the sold 'bad debt accounts', please? When you say 'new owner', are you referring to DCAs? Previously, PayPal would (at least in some cases) pass on the debt to a DCA (e.g. Moorcroft) that would try to collect it, but they are pretty much powerless and can be ignored. However, if the debt is sold to them, they might take legal action, since they now own the debt.

Formerly, PayPal would never take court action or sell debts of this type in the UK (to the best of our/your knowledge). However, based on your comment, it seems that this has changed, and PayPal have recently started selling on debts; is this what you mean? If so, when did this begin? Have the new owners (e.g. Moorcroft?) actually pursued legal action against anyone (to the best of your knowledge)?

If this were to happen with my alleged debt, could I simply ignore the new owners, unless I received a letter of claim?

Thank you very much!

Edit: It's been a while, so I've forgotten some details. I made a few amendments.

sourcrates said:

Not all debts get chased, that`s the only reasonable explanation I can give you, you may find the debt will be sold prior to it becoming statute barred, and that new owner may be aware of the debts status, and pressure you for payment possibly with the threat of impending legal action.

On the other hand all may stay quiet, and it will go statute barred 6 years after the date of default.

Recent FCA regulation, and the change to PayPal UK Ltd, has seen some bad debt accounts sold, and had legal action pursued by there new owner, but what policy PayPal pursue is still relatively unknown.

 

sourcrates

I have seen posts on the forum from those whose PayPal debts have been sold, can`t quite remember when this was, but in the last 12 months or so.

Moorcroft are just a collection agency, the debt is not legally assigned to them, so they can only collect payment, they can`t take you to court.

The risk of legal action is higher with debt purchasing companies, and yes, you can ignore them unless they send a letter before action, a perfectly reasonable strategy when you consider they only pay around 12p in the £ for your debt, then try to screw the full face value out of you.