Am I liable for PayPal debt if I opened an account as a minor?

Can you get into legal trouble? Yes. Will you? That depends

Opening Credits columnist Eric Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for

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Question Dear Opening Credits,
I am a teenager who just found out that you need to be 18 to have a PayPal account. There were some funds needing to be paid in my account, but PayPal limited it and now I'm getting calls and a letter from a debt collector. What should I do? Do I owe the debt collector or PayPal? Can I get in legal trouble? – Madeline


Dear Madeline,
you get into legal trouble? Yes. Will you? That depends.

According to PayPal’s rules, a person must be at least 18 to open an account as it is illegal to enter into a contract unless you are an emancipated minor.

PayPal does offer student accounts to children and teenagers, but to get one, an adult would have to sign for it and act as the primary account holder. The adult would be legally responsible for any unsatisfied debt, whether the primary owner knew about or approved the transactions, much as a credit card’s primary account holder is responsible for debts incurred by an authorized user.

From what I gather from your question, there was no such adult listed on your account. However, PayPal would have been within its rights to try to get you to pay the balance due, not knowing you were a minor when you opened the account. After all, you were the person who racked up the debt.

While you can’t go back in time, you should have paid the bill. When you did not, the delinquent debt was sold to a collection agency and PayPal wiped its hands off it. Now you owe a third-party company that purchased the account – hence the collection calls and letters.

The best way to deal with this is to pay the bill. If you have the cash, I don’t see why you wouldn’t pay the bill, since you’re not arguing its legitimacy. By sending a check for the total amount due, you’ll stop the communication from the debt collector and offset the small risk that the collection agency will try to legally force the matter.

For example, some creditors can attempt to take legal action against the parents of a minor. If you lied about your age to get the PayPal account, you may be held liable for the balance and even face criminal charges. Youths can commit, and be convicted of, fraud. The larger the debt is, the more likely that possibility becomes.

Now that I’ve scared you, know that the probability of being sued for a balance that you acquired while you were underage is slim, even if you did happen to fudge your birthdate. You also can try to get out of paying the debt by contacting the collection agency and explaining the situation. In a letter, state that you were under 18 when you opened the PayPal account and that no adult was or is associated with it. Provide proof of your age and include it. Send the letter certified mail, return receipt requested, which you do at your local post office.

According to the Fair Debt Collection Practices Act, a debt collector has 30 days to respond. The debt collector might drop the matter and stop communicating with you. If the debt collector chooses instead to force the matter with a letter from its lawyers, you’ll still have the opportunity to pay the bill and be done with it.

See related: Can a minor be charged for credit card theft?, Who’s liable for a minor’s medical debt?, Emancipated minors get freedom, but don’t count on credit

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Updated: 03-23-2019