Paypal Wrongfully Threatened collections on negative balance San Jose California

Their threat is real and valid.

By your own narrative you spent more than you had in your account because you failed to manage that account and keep track of your balance. Don't use the excuse that "their system" didn't tell you. THEIR system didn't spend the money..YOU did. It is also apparent that your account did not have a valid "backup" source, or this negative balance would have been taken from that.

Why their system did not let you add funds to bring it out of the negative is unknown since we don't know the specifics. But we do know that if by the time you called them and they told you to call collections, you had let it go negative for more than a few weeks.  So there is likely more to this story than you are telling.

By the way do you really think that any other company would be any less forgiving if you ended up with a negative balance with them? Before you jump ship you may want to do a bit of research as to who owns those other companies. You may be in for a bit of a shock.

 The day it went negative I tried to add funds. Waited a week and still prevented from adding funds. No weeks or long standing periods of keeping it in the negative.