
PayPal told customer her death breached its rules - adzicg
https://www.bbc.com/news/amp/technology-44783779
======
astura
Title is borderline a little clickbaity. There's not a ton of information but
from what I gather it seems like the following happened:

She had a PayPal credit card or some other form of revolving account with
PayPal (the letter references to "PayPal Credit" agreement) with a balance of
just over £3,000.

Dead people can't legally hold credit cards so she "breached" her credit card
agreement by dying - that is, an action on her part made the agreement no
longer valid. This caused PayPal to close the revolving credit line and the
balance to be due in full.

As I understand it her estate would be legally required to pay the balance if
it had the funds to do so. (99.9% sure - correct me if I'm wrong)

The letter was sent informing her of the above.

So seems like the letter was "technically correct" (the best kind of correct!)
but horribly insensitive to the point of basically being straight up cruel.
The other mistake is it should have been addressed to the executor of her
estate instead of her personally.

EDIT: Here's the UK version of "PayPal Credit":
[https://www.paypal.com/uk/webapps/mpp/paypal-virtual-
credit](https://www.paypal.com/uk/webapps/mpp/paypal-virtual-credit) Looks
like it's a revolving account without a physical card.

~~~
chrisseaton
> Title is borderline a little clickbaity

What? It's literally what the letter they sent to the dead customer says.

> PayPal told customer her death breached its rules

> You are breach in [rule] because ... you are deceased

~~~
astura
To me it makes it seem much more outrageous than it is.

The letter is absolutely terrible, horribly insensitive, cruel, and should
have never been sent.

However, like I said, it seems "technically correct" with the information we
are given.

~~~
chrisseaton
> Dead people can't legally hold credit cards so she "breached" her credit
> card agreement by dying

No it is not technically correct.

Death is not a breach of contract in UK law. It causes the contract to end.

~~~
y4mi
I thought that's what happened? Or is debt not part of the inheritance in this
case and only the savings/property given to the family?

~~~
msbarnett
> Or is debt not part of the inheritance in this case and only the
> savings/property given to the family?

Inheriting debt is virtually unheard of in most of the western world. The
estate will pay off what it can, but the rest of the debt is simply wiped out.

The exceptions here are mortgages, which are attached to the house and
therefore would transfer to whoever inherits the house, if they accept it. And
in the US some states have some kind of exception which transfers medical debt
to children in some circumstances, apparently, which strikes me as barbaric.

~~~
y4mi
i guess germany isn't part of the western world in that case?

you've got a choice if you've got an inheritance. You either inherit
everything that you're eligible to inherit (this includes any outstanding
debts) or nothing.

At least that's my understanding of my local law, but I'm neither a lawyer nor
did i ever inherit anything.

~~~
chrisseaton
> you've got a choice if you've got an inheritance. You either inherit
> everything that you're eligible to inherit (this includes any outstanding
> debts) or nothing.

But that's effectively the same situation as in almost any other country.
Debts are settled before you are eligible to inherit anything. If debts are
more than the estate has, then you don't inherit anything.

~~~
y4mi
Oh, it's very different. Either the court figues out if there is any
inheritance and distributes everything left over after settling any debts...
Or the inheritor has to figure everything out himself, potentially indebting
himself because he didn't know about a debt.

Accepting an inheritance is pretty risky in Germany, if your parents weren't
well off.

And PayPal's letter would make sense if its left for the inheritor to figure
out. But that doesn't seem to be the case if I understood the sibling comment
correctly? It's always interesting to learn stuff like that :)

~~~
chrisseaton
So why would anyone ever choose the second option? What's the upside to that?

~~~
rndgermandude
No, option one is: you get everything and have to pay off any debts that come
with it.

Option two: you refuse the entire inheritance, get nothing but also don't get
any debts.

~~~
chrisseaton
That’s not what they said. They said they distribute everything left over
after debts to inheritors.

> Either the court figues out if there is any inheritance and distributes
> everything left over after settling any debts...

~~~
y4mi
The former isn't an option in germany. As someone else mentioned on a sibling
comment: I asked about the inheritance law in UK and compared it to the german
one in your quoted sentence.

This comparision was pretty off topic and probably shouln't have been posted
in this context.

------
lainga
What does section 15.4(c) of the Paypal Credit agreement say?

~~~
ilarum
This is 15.4 (c) of the Paypal Credit agreement - "We may close the Credit
Account and demand repayment of the full amount you owe us if you die or
become of unsound mind"

~~~
claudiawerner
"demand [...] if you die"

I'm sure it will be very fruitful to make such a demand.

~~~
coryfklein
If the customer's estate has enough assets to pay the balance then the demand
will be fruitful.

------
parliament32
Although it's insensitive, it makes sense from a legal perspective. IANAL, but
I imagine it's something like:

1\. paypal receives notice she's deceased, so they have to collect the
remaining balance

2\. the creditor must notify the client (hence the letter being addressed to
her) of their account being closed, and that the full amount is due

3\. the creditor must specify a reason for terminating the account, hence the
"see section X of the agreement that says you have to be alive to hold an
account", "...you are deceased"

~~~
ABCLAW
>it makes sense from a legal perspective

No it doesn't.

This is the work of a second rate player on paypal's legal team. You do not
address letters to dead people. You address letters to their estate or if you
know who the individual is, the executor of the estate in respect of their
estate.

You do not say someone breached a contract when in fact you're exercising a
right to wind up the account triggered by death.

Either one of these errors is an annoying mistake. Both of them together is a
fairly large fuck-up. Lawyers put a LOT of work into drafting the right tone
into their correspondence.

Estates law isn't particularly esoteric, either, but most in-house counsel
practice corporate law, primarily, so it's probably just a case of a few
corporate guys going "It looks okay, I guess" when proofing the template and
not firing off a quick call to their pal that works in estates to review the
deceased creditor notice.

~~~
parliament32
I'm just saying it sounds like legal CYA. Consider [1] defines "you" in the
agreement as "The person who applied for this Account and agrees to this
Agreement." Further down, section 12 specifies that the account automatically
moves to a "in default" state if you "Pass away or become incompetent;"

Considering that "you" needs to be notified when their account goes into
default, does "you" automatically become "the estate"? Is "the estate" the one
who "applied for this Account and agrees to this Agreement"? Can an estate
agree to anything?

Is it possible a deceased person would be able to get off the hook for this
kind of debt is the agreement isn't followed to the letter by the creditor?

[1]
[https://www.paypal.com/us/webapps/mpp/bmlterms#accountAgreem...](https://www.paypal.com/us/webapps/mpp/bmlterms#accountAgreement)

~~~
vertex-four
There isn’t anything to do with the person once they die - _obviously_ you
don’t need to notify a dead person that they’re dead. The whole mess with
simply becoming “in default” is likely outright wrong in the U.K., as there’s
a pile of somewhat complex law surrounding what happens to people’s debts when
they die.

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hayksaakian
My best guess is this is a "cover our asses" (literally) template not intended
to be read by the recipient.

Maybe their target reader is people who fake their deaths?

~~~
coryfklein
> "cover our asses" (literally)

Don't you mean, "figuratively"? Or are you implying that there is some dude at
PayPal that is using this legal template as undergarments?

~~~
a1369209993
I think the charitable interpretation is that a manager said the literal words
"cover our asses" when setting this up. Or possibly the GP meant "exists for
literally no other reason than "cover our asses"".

~~~
hayksaakian
Sorry, I meant it it's literally a letter that was not intended to be read by
anyone.

------
walrus01
This email would not have been totally abnormal from a legal perspective, if
the first person references and grammar were changed to third person, and it
was addressed to an estate executor rather than directly to the deceased.
Credit card companies and similar will do the same.

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DeepYogurt
I bet the customer didn't mind.

------
walrus01
In the United States private debt collectors will attempt to get bereaved
family members of a recently dead person to begin payment on the deceased
person's debt, with social engineering tactics.

When the appropriate legal response is: "NAME is deceased, here is the contact
info the for executor of the estate".

~~~
SamuelAdams
I've never understood this behavior. How is this not considered harassment?

~~~
cremp
Because debt collectors have literal exceptions to harassment laws.

~~~
amyjess
In the US at least, you can serve debt collectors notice that they must cease
all future communications with you, and if they disregard that, the FTC can
and will go after them.

I'd recommend reading the Fair Debt Collection Practices Act.

[https://www.ftc.gov/enforcement/rules/rulemaking-
regulatory-...](https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-
reform-proceedings/fair-debt-collection-practices-act-text)

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psycombi
I always see Paypal's negative stories on Ycombinator and only positive
stories of Square & Stripe. Let's not be an unnecessary devil's advocate or a
cheerleader!

~~~
captain_perl
Excuse me, but Paypal is not a regulated bank in the USA, and they routinely
hold customer account money for 6 months.

Additionally, periodically they purge entire business categories by locking
accounts until you can prove you're not violating their terms of service du
jour.

The complaints about Paypal are justified.

~~~
ythn
You can say that about anything. Pick a technology/company you like and I'll
write an "excuse me, but" piece that "justifiably" criticizes it.

~~~
Retric
Can you think of any good thing about paypal beyond user experience? I am open
to suggestions, but I don't know of anything.

