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Should PayPal Pay NSF Fees Caused by Transfers

On Feb. 14, I received a notice in the mail from my bank that my checking account was overdrawn. I knew this was impossible, so when I called the bank, they told me that PayPal had withdrawn $606 and $467 from my account several days before. This balance reduction caused me to be charged seven NSF fees at $31 each, plus they were returned to those who I gave them.

When my husband and I went to the bank, the bank would only refund three of the fees. I contacted PayPal and the man I spoke with said they noticed there was suspicious activity in my account. They investigated and have since refunded the money debited from my account. I then spoke with the Resolution Services Supervisor about the three $31 charges that I still have to pay, plus I expect I'll have fees from the checks that were returned. She did not think that PayPal was responsible for those fees.

My questions to you are as follows:
  1. Is anybody responsible for these fees besides me?
  2. Shouldn't PayPal, who advertises itself as being so secure, have sent me notification of these payments?
  3. Shouldn't PayPal have seen and done something about such large amounts being withdrawn from an account where such small amounts had previously been withdrawn?
  4. What can I do about this - is there anybody in any position who can help me?


From what you said, the bank refunded some fees and was under no obligation to refund any of them. PayPal, in our opinion, was the weak link here and should refund you the fees caused by them and their systems, but that is a moral opinion. Your agreement with them may address this and likely, they have no real liability to do so.

You could call and ask again and ask for a supervisor and then that person's supervisor, until you exhaust the chain of command, get the refund, or grow tired of requesting remuneration. It could end up that you will be paying the bill on this one, but if you are going to call PayPal, be sure you have the total cost because as you noted, there may be fees charged to you by those who get your checks returned to them. If you get a refund, you want to know the total as going back for a second refund or a third would be difficult.

Published on BankingQuestions.com 2/27/07