PayPal to charge 'inactive' customers £12 a year – how to avoid it

PAYPAL customers will be charged £12 a year if they don't use accounts – but there are steps you can take to avoid it.

From December 16 this year, PayPal will apply the charge to customers accounts that have been "inactive' for 12 consecutive months.

PayPal says an "inactive" account is where the customer hasn't logged into their account or used it to send, receive or withdraw money.

If your account has been inactive for over 12 months, you'll be charged the lesser of £12 or your entire PayPal balance.

For example, if there's £3 in the inactive account, the fee will be £3. If there's £20 in the account, £12 will be taken.

If you don't have any money in your PayPal account, or your balance is negative, you won't be charged a fee even if you have a debit or credit card linked to the account.

PayPal couldn't confirm how many inactive UK accounts there are when contacted by The Sun.

MoneySavingExpert founder Martin Lewis warned about the changes on Twitter yesterday, he said: "Paypal users warning. It is going to introduce a £12 inactivity fee."

It led to a flurry of comments from unhappy customers, with one Twitter user adding: "Guess I’m deleting my PayPal account then."

While another user tweeted: "Appalled to see that @PayPal is going to charge a £12/year 'inactivity fee' for accounts that have been dormant for a year.

"Preying on the unwary and unsavvy."

How to avoid the fee

If you have a PayPal account but don't use it regularly, you can easily avoid the fee by logging into your account or making a transaction before December 16, 2020.

This means your account will have been active in the previous 12 months, so you won't be charged.

If you don't use your PayPal account and don't want to risk being charged in future, you may want to consider closing the account.

Once logged in, simply go to "settings" and select "close your account" at the bottom of the "account" tab.

Another option is to keep the account open but transfer any cash you have to another account, as you won't be charged by PayPal in future if your account doesn't have a balance.

The payment services firms told The Sun it'llwarn inactive customers that they could need to pay a fee, by sending them notifications 60 days, 30 days and then seven days before the fee is set to be charged.

If you get an email that looks like it's from PayPal, be aware of the scam that has targeted thousands of Brits.

In May, PayPal launched a new phone-to-phone contactless payment app to help people go cash free during the coronavirus crisis.

Plus, we reveal the top pre-paid currency cards will steal your cash if you're inactive and forget about the money.

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