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PayPal introduces new fee for dormant accounts

theguardian.com

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Re: PayPal introduces new fee for dormant accounts

#131

Post by gravitas »

justinclift wrote: post #130
gravitas wrote: post #128

Earlier quoted context omitted.

> There is no "legal paperwork" for accounts. ...so I can just throw away all the tax documentation for my mid/high tier interest bearing checking and savings accounts at both my credit union and bank? that share certificate I have at my credit union generating dividends? "Legal" to me means "things I have to do or the police come find me." Your interpretation might be different, but my accounts have legal paperwork.

Is that "legal paperwork" something which you (the end user) has to do, and not something that the credit union/bank does?

Both. Financial institutions (broadening this to cover brokerages as well) produce federally required documentation (it may be digital in 2020, automated) for tax purposes; the most common in my travels is a 1099-DIV (dividend payments) but there are many kinds for all sorts of financial things a bank could/can handle related to investment income.

Both parties submit paperwork to the IRS - the institution tracks the assets they're holding/managing and reports it to the IRS on their side; they issue you appropriate documents and you do your taxes and report it using whatever appropriate form. The paperwork is of course dependent on the situation, for the average checking/savings accounts I will guess it's the 1099-DIV as most common - simple interest payments.

Re: PayPal introduces new fee for dormant accounts

#132

Post by gravitas »

gravitas wrote: post #131
justinclift wrote: post #130

Earlier quoted context omitted.

Is that "legal paperwork" something which you (the end user) has to do, and not something that the credit union/bank does?

Both. Financial institutions (broadening this to cover brokerages as well) produce federally required documentation (it may be digital in 2020, automated) for tax purposes; the most common in my travels is a 1099-DIV (dividend payments) but there are many kinds for all sorts of financial things a bank could/can handle related to investment income. Both parties submit paperwork to the IRS - the institution tracks the…

I got that slightly wrong, it's 1099-INT for interest in income on checking/savings, 1099-DIV is for dividends only.

Re: PayPal introduces new fee for dormant accounts

#133

Post by stanmancan »

justinclift wrote: post #77
stanmancan wrote: post #72

Earlier quoted context omitted.

That seems incredibly doubtful and highly illegal. I can’t imagine that happening without lawsuits being filed.

Yep, clearly very illegal. It's kind of funny you say that too, as people have been saying that forever . eg "If they were so bad, stuff would have been done" (sic). Look at PayPal's reputation going back a decade or two, and you'll see there are tremendous amounts of stories about it. People used to set up dedicated websites collecting the copious horror stories. Not kidding about that, in any way. At the same time,…

I avoid PayPal like the plague, but I would require some hard evidence to convince me that employees were regularly stealing users money.

Re: PayPal introduces new fee for dormant accounts

#134

Post by clintonb »

chrisseaton wrote: post #120
clintonb wrote: post #103

Earlier quoted context omitted.

Note: I'm on the board of a credit union. There is no "legal paperwork" for accounts. The only real costs for managing accounts comes from mailing monthly statements. The last time we discussed these statements at a meeting, it was reported they cost about $1.00 (on average) to send.

Do you literally still mail paper statements? Why?

Yes, paper statements must be offered due to federal law. Not everyone has a computer. Like many institutions, we make e-statements an opt-out option for new accounts; however, we still have older accounts that continue to receive paper statements.

Re: PayPal introduces new fee for dormant accounts

#135

Post by clintonb »

gravitas wrote: post #128
clintonb wrote: post #103

Earlier quoted context omitted.

Note: I'm on the board of a credit union. There is no "legal paperwork" for accounts. The only real costs for managing accounts comes from mailing monthly statements. The last time we discussed these statements at a meeting, it was reported they cost about $1.00 (on average) to send.

> There is no "legal paperwork" for accounts. ...so I can just throw away all the tax documentation for my mid/high tier interest bearing checking and savings accounts at both my credit union and bank? that share certificate I have at my credit union generating dividends? "Legal" to me means "things I have to do or the police come find me." Your interpretation might be different, but my accounts have legal paperwork.

Good point. 1099s must be submitted to the IRS; however, that is done electronically. The cost, shared by all accounts, is negligible.

Re: PayPal introduces new fee for dormant accounts

#136

Post by justinclift »

stanmancan wrote: post #133
justinclift wrote: post #77

Earlier quoted context omitted.

Yep, clearly very illegal. It's kind of funny you say that too, as people have been saying that forever . eg "If they were so bad, stuff would have been done" (sic). Look at PayPal's reputation going back a decade or two, and you'll see there are tremendous amounts of stories about it. People used to set up dedicated websites collecting the copious horror stories. Not kidding about that, in any way. At the same time,…

I avoid PayPal like the plague, but I would require some hard evidence to convince me that employees were regularly stealing users money.

No idea if that's still the case (hopefully not), but it was widely known when they were a young company. It shouldn't take much effort to look into, if you actually care enough to investigate. :)
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