PayPal (PYPL) is set to charge customers up to £12 ($16) a year if they do not use their accounts.
The inactive account fee will begin on 16 December 2020 and customers will be charged if they have not logged in or sent, received or withdrawn money for at least 12 consecutive months.
But customers can avoid being charged by logging into their PayPal account or making a transaction on or before 15 December.
Moneysavingexpert founder Martin Lewis warned customers of the new charge in a tweet yesterday.
He said: “Paypal users warning. It is going to introduce a £12 inactivity fee.”
Paypal users warning. It is going to introduce a £12 inactivity fee. Here's how it works, and how to avoid it... https://t.co/fPJkizykEo— Martin Lewis (@MartinSLewis) October 13, 2020
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His team have put together a guide on how the charge works and how to avoid it.
If an account has been inactive for more than a year then the account holder will be charged £12 or their entire PayPal balance, if it is less than £12.
If there is no money in the Paypal account or the balance is negative there will be no charge.
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PayPal said it will warn inactive customers of the pending fee by sending notifications 60 days, 30 days and then seven days before the fee is set to be charged.
The online payment company said it had no plans to close inactive accounts with no balances.
Moneysavingexpert advises customers to login to their account before the deadline to avoid the charge or to close their account altogether. An account can only be closed online and not via the app.
Another option is to keep the account open but transfer any money into another account. Customers won't be charged in future if their PayPal account doesn't have a balance.
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