Not upheld: Account closure without notice complaint against PayPal UK Ltd

Decision detail

Summary

Mr D requested closure of his PayPal account by sending a signed for letter, which PayPal did not receive. PayPal refused to close the account due to an outstanding negative balance of approximately £100 from early 2018. Mr D complained to the Financial Ombudsman Service, but the ombudsman found that the complaint about the negative balance was brought outside the applicable time limits (more than six years after the event and more than three years after Mr D became aware of it in late 2018). The ombudsman determined that PayPal was not responsible for not receiving the undelivered letter and that PayPal's policy of refusing to close accounts with outstanding balances was fair and reasonable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Financial Ombudsman Service time limit rules (DISP 2.8.2R) and determined that Mr D's complaint about the negative balance was out of time, having been brought more than six years after the event and more than three years after Mr D became aware of the cause for complaint in late 2018. No exceptional circumstances or consent from PayPal existed to override these time limits. Regarding the account closure refusal, PayPal did not receive Mr D's letter (confirmed by postal service), so PayPal could not be held responsible for not responding to it. PayPal's policy of not closing accounts with outstanding negative balances was deemed reasonable and fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website