Can PayPal Take Money From Your Checking Account After You Close the PayPal Account?

PayPal can't withdraw money without your consent.
PayPal can't withdraw money without your consent. (Image: David Woolley/Lifesize/Getty Images)

Numerous online functions require you to agree with term and conditions. Many times a box opens with the item you are agreeing to and sometimes a link is offered for you to review. When opening a PayPal account, you click a button that says, “Agree and Create Account,” but just above that button it reads, “By clicking the button below, I agree to the PayPal User Agreement and Privacy Policy.” You may be surprised by what you agreed to, especially should you ever decide to close your PayPal account.

PayPal User Agreement

PayPal’s user agreement is the contract between PayPal and you, the user. It provides the terms, actions, rights and responsibilities of both you and PayPal. The contractual language it is written in can be confusing. Many provisions in the agreement protect you: security provisions and limits on financial loss due to fraud. PayPal is protected by many of the provisions when it comes to ensuring limiting liability and its ability to collect funds owed to PayPal. It is important to know the date on which you opened your PayPal account, because the user agreement you committed to may be different from the one posted on PayPal’s site today.

PayPal Privacy Policy

PayPal will not disclose your information, except internally and to other organizations that are responsible for ensuring the safety and fraud prevention services, as well as providing relevant information if law enforcement agencies requires PayPal to disclose the information. Information may be shared if any of your payments or remittances has been an error. However, PayPal will confirm transaction numbers, accounts, amounts and other information internally and try to identify the problem by giving basic information without revealing banking details to the parties involved.

PayPal also indicates that it could change any of its privacy policies, and it will inform users of these changes. However, PayPal does not ask for permission when changing these policies. Still, PayPal gives protection for privacy to its users and offers discretion and confidence.

Closing a PayPal Account

To close your account, you must enter your profile. At the top of the page there is an option for "Profile"; log in, select "Close Account” and the system will prompt you to complete some additional steps. Before you disable your account, you may delete the numbers of your credit or debit cards and your checking account number for security. To do this, you have to log in to your profile and then go to "Bank Accounts," select which account numbers you want to close and you should be done.

When making this decision you should know that you cannot reactivate your account. When you close your account, you erase your access to the transaction history and all kinds of transactions are suspended. You cannot delete your PayPal account if you have money in your account.

One Risk of 'Agree and Create Account'

The user agreement used to open your PayPal account may allow PayPal, in certain circumstances, to remove money from your bank account. If you signed your user agreement after Oct. 11, 2001 and before Feb. 7, 2003, you are at risk if you had linked your bank account to your PayPal account. By clicking on “Agree and Create Account” you agreed to allow PayPal to remove funds from the linked bank account that are owed to PayPal. The user agreements from Feb. 7, 2003 forward are more vague as to if PayPal can remove funds from your bank account. However, the language in the agreements does suggest that it is a possibility if you owe PayPal money even after you close your PayPal account.

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