Personal Finance

Do PayPal Debts Appear On A Credit Report?

[OP]
Newbie
Sep 30, 2008
26 posts
2 upvotes
Montreal

Do PayPal Debts Appear On A Credit Report?

An acquaintance in the USA finally paid me by PayPal for money I had given him a while back. But I didn't realize that he had listed it as payment for goods. So the SOB launched a fraudulent chargeback claim for "item not received" on my account for $8000 while I was outside the country and unable to reach a computer to defend myself. Apparently he knew how to game the system, and there is no way to appeal it and I am screwed. My PayPal account balance is now negative -$8000. It has no bank accounts associated with it, or Social Insurance Number, but they have 5 of my credit cards on file.

Now I have a collection agency called NCO calling me every day reminding me to make the payment to PayPal and telling me that they haven't yet reported the debt to credit agencies. Now my account has been in the negative for 3 months.

1. Can they report me to Equifax? Is this possible in Canada? There have been conflicting reports that Paypal debts specifically do not appear on credit reports.

Frankly I was thinking of just not responding and not paying them.

2. Does eBay share information with PayPal? Will they close my eBay account too?

3. There is a lot of information on the web on how to send a debt validation letter, but that is in the USA. Do I have the right to ask NCO to validate the debt and produce my signature that I actually used the service? (Prove that I actually owe this debt.)

4. Can anyone here offer some real factual advice from experience with PayPal or debt collection in Quebec?
84 replies
Deal Guru
May 29, 2006
10055 posts
2647 upvotes
story doesnt add up to me, someone just somehow charged an 8000$ purchase against your paypal account? and you are out of country so you dont check your bank account? I mean thats alot of money to dissappear out of the blue. you must have some recourse with paypal.
[OP]
Newbie
Sep 30, 2008
26 posts
2 upvotes
Montreal
rocking23nf wrote: story doesnt add up to me, someone just somehow charged an 8000$ purchase against your paypal account? and you are out of country so you dont check your bank account? I mean thats alot of money to dissappear out of the blue. you must have some recourse with paypal.
Welcome to the PayPal nightmare. You have a lot of newbie questions. Go to www.paypalsucks.com and see their forum to learn how PayPal works.
Deal Addict
User avatar
Feb 18, 2009
1543 posts
487 upvotes
Edmonton
curiousgeorge75 wrote: PayPal allowed a scam chargeback claim on my account for $8000 while I was outside the country and unable to reach a computer to defend myself.

The story behind this please? :-0
Deal Expert
May 30, 2005
44551 posts
5116 upvotes
Richmond Hill
rocking23nf wrote: story doesnt add up to me, someone just somehow charged an 8000$ purchase against your paypal account? and you are out of country so you dont check your bank account? I mean thats alot of money to dissappear out of the blue. you must have some recourse with paypal.
There is a recourse, but Paypal sets a time limit for it, so sounds like OP is SOL.

NCO is a collection agency, not a bank. They don't have the authority to write on your credit report, they just buy debt from Paypal and collect them to make money. Just ignore the calls, tell the the person doesn't exist anymore. They'll stop bugging you.
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Deal Addict
Dec 31, 2009
1568 posts
146 upvotes
Yeah, I think we need more information.

You have 8 credit cards set up with Paypal (kind of strange and a red flag, but whatever), but no bank account. So what happened? You sold something for $8000. How did you get the money? Did Paypal credit it against a credit card? And then the buyer initiated a chargeback and they took it back from your credit card?

Call your CC company. If it's beyond their limit (which is usually 30 days) you might be SOL. Just because you leave the country doesn't mean you don't have to keep track of your finances. I wish it was that easy.
Member
Nov 14, 2009
236 posts
54 upvotes
Jon Lai wrote: There is a recourse, but Paypal sets a time limit for it, so sounds like OP is SOL.

NCO is a collection agency, not a bank. They don't have the authority to write on your credit report, they just buy debt from Paypal and collect them to make money. Just ignore the calls, tell the the person doesn't exist anymore. They'll stop bugging you.
What are you talking about? Collection agencys are fully capable and allowed to report to your credit file. Don't ignore the debt, keep trying to work it out, ignoring it will only screw you down the road.

Collection agencies don't stop bugging you, if they are unable to collect they will sell it to another agency until someone is able to track you down.
Deal Guru
May 29, 2006
10055 posts
2647 upvotes
I had debts go to collection around 10 years ago and they never got paid and its not on my file anymore

I owed newfoundland power around 300$

and I owed the cell company -I think rogers, around 250$.

I told them to sue me if they want, the calls and letters stopped. I get my report yearly from equifax, and none of it is on there.
[OP]
Newbie
Sep 30, 2008
26 posts
2 upvotes
Montreal
Jon Lai wrote: There is a recourse, but Paypal sets a time limit for it, so sounds like OP is SOL.

NCO is a collection agency, not a bank. They don't have the authority to write on your credit report, they just buy debt from Paypal and collect them to make money. Just ignore the calls, tell the the person doesn't exist anymore. They'll stop bugging you.
In this case it doesn't appear that they bought the debt from PayPal. I asked if they bought the debt from PayPal and they said no. PayPal seems to have hired them to go after me for them. In fact, they asked that I log into my PayPal to make the payment.

It doesn't matter whether it is NCO that reports the debt to Equifax or PayPal that reports the debt. I just need to know whether it can cause a negative mark on my credit report/score.

I asked them whether this debt was reportable to the credit bureau and they said YES and that YES it would negatively affect my credit score. They said they report after 6 months of non-payment and that "6 months" elapses in 3 months.

I just don't know what to believe.
Deal Addict
Dec 13, 2007
1606 posts
90 upvotes
Toronto
Yes the story makes no sense. More details, please. Were you selling moon real estate on ebay?
[OP]
Newbie
Sep 30, 2008
26 posts
2 upvotes
Montreal
XShadowX wrote: The story behind this please? :-0
See below.
Paulfistinyourface wrote: Yeah, I think we need more information.

You have 8 credit cards set up with Paypal (kind of strange and a red flag, but whatever), but no bank account. So what happened? You sold something for $8000. How did you get the money? Did Paypal credit it against a credit card? And then the buyer initiated a chargeback and they took it back from your credit card?

Call your CC company. If it's beyond their limit (which is usually 30 days) you might be SOL. Just because you leave the country doesn't mean you don't have to keep track of your finances. I wish it was that easy.
Correction. There was no "confirmed" bank account on file. Unconfirmed bank accounts can accept deposits, but PayPal can only withdraw from confirmed/verified bank accounts. Read below.
slavka012 wrote: Yes the story makes no sense. More details, please. Were you selling moon real estate on ebay?
Let's just be clear here: the story behind it has almost no relevance to any of my concerns or questions. However I will humour you.

I got paid $8000 and the money was withdrawn to my unconfirmed bank account. The buyer did a scam chargeback claim as "item not received" because he had listed the payment as a "payment for goods" instead of a cash payment. I did not respond within 7-10 days, therefore PayPal credited the buyer and debited my PayPal account; leaving it with a negative -$8000 balance. They could not debit my bank account as it had not been verified/confirmed.

I called them and they said there was nothing they could do because they had already paid back the buyer. Then they sent NCO on my ass.

This thread is not about what I should/could have done. There is no appeal with PayPal at this point. I need advice on credit reporting and NCO with regards to this debt. Advice based on factual experience with PayPal and Equifax are appreciated.
Deal Guru
May 29, 2006
10055 posts
2647 upvotes
so you have the 8000 dollars, so in fact your breaking even, depending on the "services" you sold.

pay the bill, take the person to court.
Deal Addict
User avatar
Jan 26, 2007
2763 posts
836 upvotes
Perhaps the chargeback wasn't a scam? Perhaps the person was truly unhappy with the service to the point that they didn't trust you to 'make good' on it, so they just went direct to a chargeback?

Dare we ask what the service is? You're asking for help, and some people don't like the idea of helping scammers, so people will want to know more about the situation: we have to take your word for it that you are the scamee, but maybe you're the scammER. Who knows? With only 5 posts to your name on RFD prior to this thread, I think most people will not have built up the trust required to take everything you say on face value.

That said, my advice is you should contact PayPal directly and try to work it out with them. Be as persistent as the collection agents are being with you. Keep calling until you're put in touch with someone "in charge" enough to explain things to you and listen to you.
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