If you account balance is 0 you are not changed anything. They don’t charge your bank/card. They will only take the charge from any PayPal account balance.

So most users of PayPal who use the service to purchase things won’t ever see a charge as in the UK because a refund will go back to the payment source not your PayPal account balance.

If you receive payments via PayPal and let it sit in the account for a year without making a balance transfer or using the balance to purchase anything, then they will charge kicks in, if you have less than £20 in the account then they will charge what is in the account.

I’m not saying I agree with this policy, I think it’s BS too, but it’s not like they will bill your debit/ credit card or bank £20 because you stopped using them (eBay while still supporting PayPal tries their hardest to get you to use their own payment processor over PayPal, so it’s pretty easy to not even notice you are not using PayPal for purchases).

As for “how is this legal”, it’s in the terms we agree to when using their service. They can add inactive account charges, as they could argued that they make their profits from purchases and payments from those interconnect fees. Having a dormant account isn’t making them money (I’ve seen credit cards have similar terms, use it or get charged).

Again I don’t agree with the policy, just answering.

Makes sense, I suppose. Still seems a little perverse to charge someone for holding their money and, presumably, profiting from inaction even if only in some small way.