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How should friend's neg balance be fixed?
 

About 5 months ago, in October, I wanted to withdraw 200$ from PP but instead sent it to my friend's account. He then withdrew to his own bank account and then payed me in cash as a favor. Soon after paypal limited both of our accounts, returned 200 to my account, and put my friend's account in negative 200. I successfully withdrew the 200 again so basically I made a 200 profit off paypal (although my friend still has a negative account). Paypal has sent him numerous emails and a couple of days ago sent him a letter to his house.

What happens if he keeps ignoring it? Technically he could have just been a purchaser from me (although we let paypal know we were friends in the days of the limitation) and if I chose to be a bad seller I could have easily taken advantage of him in this case and he would have no other choice. Technically he's within full rights and his excuse is perfectly reasonable given I'm a "bad" seller. at the same time it WAS a transfer and not an official purchase. What power does PP have over him if he keeps ignoring their requests to make up the negative balance?

Thanks a lot in advance.

Does paypal have his social security number? the most they can do is place it on his credit report which could easily be removed.

They don't. But i've heard of more serious notes mailed to people from debt collectors. Don't know how serious this can get. Ironic that this all happened due to something I sold on ebay rather than the actual money transfer which had nothing to do with ebay. Paypal even admitted that on the phone. Not only did they wrongfully restrict us for reasons which had nothing to do with the transfer, but now they want him to return the money too. If he had really sold something to me, he would be out of luck. It makes no sense when I think of it that paypal would refund me and put him in the negative considering its very likely we do not know eachother and very likely i'd keep the money and screw him over.