Not upheld: account closure and default recording; alleged failure to communicate account status complaint against PayPal UK Ltd

Decision detail

Summary

Mr J complained that PayPal unfairly closed his credit account and recorded a default on his credit file after he experienced financial difficulties due to reduced self-employed income. Mr J claimed he did not receive PayPal's default notice and that PayPal should have been more explicit about the seriousness of his account status given that PayPal was aware of his financial difficulties from a July 2025 call. The ombudsman found that PayPal provided adequate information through monthly statements and emails, that Mr J was aware of the consequences of arrears, and that PayPal's decision to close the account was reasonable given the absence of payment and contact from August 2025. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mr J was aware of the consequences of arrears on his account, having contacted PayPal in July 2025 and made a payment to avoid default. PayPal provided clear information through monthly statements and emails confirming missed payments. The ombudsman considered that PayPal could reasonably expect Mr J to check statements and contact PayPal if needed. Although Mr J did not receive the default notice, the ombudsman was satisfied it was correctly addressed and sent as claimed. The ombudsman found that when payments were not maintained and contact was not received, the relationship was not being maintained as agreed, making the default reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website