PayPal is about to start charging Canadian users an 'inactivity' fee. Here's how to avoid it

This March 10, 2015, file photo, shows signage outside PayPal's headquarters in San Jose, Calif. (AP Photo/Jeff Chiu, File)

Online payment system PayPal is about to start charging its Canadian users a fee on accounts that have not been used within a 12-month period.

Starting Nov. 20, PayPal will begin implementing the fee, charging accounts that have not seen any activity over a course of a year.

"The fee will only apply to accounts that have been inactive for 12 months - where the account holder has not logged in to the account or used it to send or receive money during that period," a PayPal spokesperson said in an email to CTV News Friday.

However, the E-commerce company said the fee won't be applied to accounts that carry a zero balance or are in the red.

"No fee will be charged on accounts with negative balance and the fee will be charged in a way which will not result in a negative balance," the spokesperson said.

So, for instance, if a user carries a balance of $7 and has let the account go stale over a course of 12 months, PayPal will charge an inactivity fee of $7 on the account.

The maximum fee that would be applied to an inactive account is $20.

Avoiding the inactivity fee is pretty simple: just log into your account before Nov. 20.

If users fail to log in before the fee goes into effect, they will be notified via email before it's applied to the account, advising the PayPal client of the inactivity.

The warning email "will inform customers about how to use the balance available on the account" before the fee is applied, the spokesperson said. A user can simply withdraw, donate or make a transaction to avoid the new penalty.

PayPal has already implemented the inactivity fee in several European countries including the UK and Sweden.

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