I owe paypal ￡5000 because i acted as a middleman for an old school friend, i held the money until he had posted the item, and i transfered it once he told me it was posted, however he hadnt and the buyer requested a refund from me, so now paypal has take 5000 from my balance of 0 so i now owe them 5000. isnt this wrong? they are threatening with debt collectors what can they actually do? do i actually owe them......

Yes you owe PayPal.

They play hardball, so find a way to pay them ASAP, or you'll never be able to get a credit card, loan, mortgage or tenancy agreement for umpteen years.

Of course it's wrong. But your friend is the one who did wrong, not paypal. Of course you actually owe them. Your friend is the one who scammed you. You entered voluntarily into business arrangement with paypal, and they have every right, both morally and legally, to expect you to honor your commitment.

hes vanished his phone goes to dial tone and hes blocked me on facebook after i sent him loads of messages trying to get him to pay me back

yes you owe them... get your friend to pay you back to pay for that debt...

you got involved with something you shouldn't have - get the money from you "friend"