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Thread: Paypal Smart Connect Credit Problems

  1. #1
    Join Date
    Sep 2016

    Angry Paypal Smart Connect Credit Problems

    Hello Everyone. I am in serious need of help. I will try and make this as short as possible. A little over two years ago I got accepted for a paypal smart connect credit account (not your regular "secured payment" account to send payment to merchants). Everything was good for a little while and then I noticed that there were some monthly payments to my balance that I had made to paypal directly from my bank account that were never posted to me paypal account. I checked with the bank and saw where the payments were made and accepted from paypal. When I first called to talk to someone about the situation, it was almost impossible. After months of issues with them, I finally got to talk to someone who was willing (so I thought) to look in to the situation for me. We agreed to put my account of a freeze (do to the constant late fees and finance charged that were racking up) until we straighten it all out. I had a package from my bank showing the payments that were made to paypal and that they were accepted,etc. My real balance at the time was just about the total of all the payments (there was 4 total) that were missing. After waiting for several weeks and not receiving any answers back from them, I have to admit that I totally forgot all about them. Here we are two years later and they come up on my credit report as a Charge Off! Needless to say I was shocked and pissed at the same time. I immediately contacted paypal and they wouldn't discuss anything with me as they told me that my account was turned over to collections. Gave me the number to NES (National Enterprise Systems) and had me call them. Once I did, I informed them of the situation and also told them that I had absolutely no idea that this was going on and that I was never contacted by them or paypal. Then later found out that they were not given the correct contact information for me and so this is why I never heard anything from them. I also found out that my account was turned over to collections the minute I got off the phone with paypal when we agreed to freeze my account. So they basically stabbed me in the back, acting like they were going to actually look into this issue, knowing that they were turning it over to collections. I don't understand how any of this can be legal! Mean while, this is holding me up from getting approved for a mortgage to buy a home that I have very limited time in buying!!!!! And there's nothing that can be done. I MUST pay what they want and then there's no guarantee that paypal will even correct the way that it is reported on my credit report, therefore I could still have this issue and be out over $400 of my hard earned, much needed money. BTW, the actual balance is less then half of what they now want because they never placed my account on a freeze and continued to charge late fees, etc. Someone PLEASE help me and tell me what I can do. Thank You in advance.
    Last edited by DawnS; 09-19-2016 at 01:29 PM.

  2. #2


    PayPal will stab anyone and everyone in the back and put the blame on others for what they do. First what do you mean "i saw monthly payments" did you initiate these payment and to whom were these payments going to. As long as you can prove you made on time consistent payments to what we believe is some sort of PayPal credit card then there's nothing to worry about. The only way PayPal can get a collection agency after you or write you off as bad debt, is only and only if you miss 4 straight payments in a row in a 4 month period.

    Read the consumer protection act. As long as you can prove you knowingly made payments to the account and they never accepted the payments, aka validate the method of transfer was correct. If you have a bank statement which shows any type of payment made to that account, and you didnt change anything, then you can sue them.

    First thing that you have to do is write a do not call letter, say you want everything in written formation. Since you cant believe anyone, documented conversation is the way to go, and thats your legal write. Once you get a documented conversation going, get a PO Box and tell them with a certified return receipt letter, that all correpondence must go to the PO Box (so that these assholes arent harrassing you at home).

    Since there is an issue with the actual balance being owed, tell them you want established proof the debt being owed and the proof that balance is what is owed. They have to go back and look at statements and payments. If you made payments and have it documented from the bank, if you made a $150 payment in June 2015, then the collection agency has to provide proof of the charges and proof of the actual payments to come up with the actual true amount of debt owed. If you did purchases, just say you never purchased those items and they were fraud. You didnt know it. Since you state they had the wrong information, from where ever they got it, and you can prove that, you can say they never informed you.

    Just keep throwing road blocks at them, and never tell them you'll make a payment so that the statue of limitations gets closer to the expiration date.

  3. #3
    Join Date
    Sep 2016


    When I say "I saw monthly payments missing", I am saying that when I received my monthly bill from them, I saw a late fee and it saying that I had an over due balance. I knew that I did not because I scheduled my payment to be made just like I usually did. I double checked with my bank and sure enough, there was the payment that I had scheduled and it was received by paypal. However, paypal did not post it to my account. Of course I called them and they were absolutely NO help, quite rude actually. So when I looked in to it even further, I noticed that this didn't just happen once, it had happened 3 times! Well, it took me a few phone calls to those people in order to find someone who at that time was supposed to be helping me. We agreed to put the account on a "freeze" until we could figure out wth was going on. I had to send them in the statements from my bank showing my payments and how they were received by paypal. After I sent off this package, I hadn't heard a word back from them at all.
    I know this is no excuse, but I am an extremely busy person, so after a couple weeks of not hearing anything from them, it was gone from my mind! Completely forgot about paypal and now here we are 2 years later!
    But what I found out through all of this is that Paypal turned my account over to a collection agency most likely 2 seconds after we agreed to put the account on a freeze. And then I never heard from the collection agency because PAypal didn't give them the correct contact information for myself. So who's problem is that now???? Mine of course! However, I don't see how that's fair. If Paypal had their act together then they would have given the collection agency the correct contact info and I would have had this taken care of by now.
    With all that being said, Unfortunately I do not have time to fight with them at that moment. I am trying to get pre-approved for a mortgage on a house that I have to put a bid in on immediately or I will loose the house. So I have to do what they want and pay the balance. You can not have any open disputes when applying for the type of mortgage that I am going for. So this is where I am really getting screwed. I will however, fight to get my money back (at least the amount that was previously paid) once I get this house that I am going for. The worst part of this whole thing right now; I paid what they wanted and they're not even going to try and help me out when it comes to how they report it to the credit bureau! My mortgage guy wanted it deleted but as we all know, that's never going to happen. But if they would at least do a "paid in full Derogatory" but they said that it gets kept as a Charge-Off but will show a zero balance. That doesn't help me at all. So they have basically screwed me with something that is mainly their fault. So I will do what ever it takes to screw them right back!

  4. #4


    So basically you had an open line of credit with PayPal for online purchases.

    First, you have to look at each statement and prove that each payment was deducted from your bank account prior to each due date. No late payments nothing. They have to be on time payments. Your bank statement must show proof that bank line statement shows PayPal (or something that links that payment to that PayPal Smart Account) Once that is done, you get a letter from your bank stating you made these payments and these payments were deducted from your account.

    Each transaction that was electronically debited from your account has a merchant id number / transaction code (your branch manager will know this). Try to find proof that that merchant id number belongs to PayPal. This will prove that PayPal themselves took the money electronically.

    Since the debt is on your credit report, you have to call all 3 agencies and dispute the transaction or statement made on your credit report.

    You establish proof that the debt is owed (Consumer Protection Act of 1978). You contact PayPal and tell them straight out, that you have proof that you made the payments and the so called late fees (if warranted proof is supplied) was invalid. You then contact the attorney generals office, file a complaint with the Federal Trade Commission, and the BBB (and file these without delay once you have your documented evidence).

    The collection agency....PayPal has the legal right to sell your debt, but the original terms have to be honored by the new creditor. Well in this case it was charged off as bad debt. First, download and read "The Consumer Protection Act of 1978", those are your rights under debt collection. It tells what the collection agency can and cannot do. The collection agency is banking on notion that you don't know your rights. First, you demand proof of the debt owed to the new creditor. They must establish beyond any doubt that you owe the debt. Dont say, dont put in writing any admission that you owe the debt or will make payments to pay off the debt. They must supply you with documented proof you owe the debt. Then ask them why was this placed on debt collection and what was the reason for it. (your basically baiting them in). If they go and say because you didnt make 4 consecutive payments/didnt make any payments to the debt owed and you got charged off as bad debt. Then take the letter from the bank that has the payments deducted, and mail it and say debt paid, or have the debt readjusted to not include any late fees, interest etc.

    There's also another section called the Uniform Commercial Code. Which states if PayPal refused the payment, then the debt has to be legally discharged. So you can get a written statement from PayPal stating that they never accepted the payment.

    The credit report. Go to your credit reporting agency, and that documented proof that they had all the wrong contact information, play it to your advantage. If you have any documentation which shows that it was incorrect, not you had an old address, moved, and never bothered to update it. And say "hey this isn't me" you have to disprove the address PayPal had on file is not related to you in any way, you never lived there, you never placed it on any applications nothing. Dispute the debt owed!

    The whole point is that you have to get a statement from your bank which proved during the time of the account opening to the date of charge off of debt, that you were not late with any payments, you have to obtain actual statements say for example March 2010 says payment is due on the 5th, you have to show on your bank statement that March 2010 payment was made. Which is why you should of looked for some sort of receipt of payment or confirmation code. Second, its your responsibility to make sure your account is maintained properly. Which means if your using that online account, you should of known payments made plus the transactions you were doing. You admit you had statements, well again your responsibility to look at the statements each and every month to see the account being credited. The fact that you set up "automatic payments" is no excuse. You should of known something was wrong no later than the 2nd month that credits weren't being credited to your account and looking at each statement. If you looked at these statements immediately, then this would of been avoided.

    In addition, when you sent off the "package" supplying proof of the payments, did you send it certified mail return receipt, did you get a case number / reference number. Or did you just throw it in the mail with no references. In addition, seems really weird that you would put something in the mail and mysteriously "forget" about it. So something there is raising a red flag to us with your story. Common sense would of been wait a week and follow up immediately with it. You knew there was a situation where there was no payment being recorded, you knew this would and could effect your credit rating. Your a very busy person, PLEASE! Something that involves you if you were even serious about it and statements like "you completely forgot about it" and "im a very busy person" makes someone wonder if your really telling the whole story!


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