In the instance where you are unable to repay your short-term loan, your credit provider can instruct registered debt collectors to collect the outstanding amount, plus lawful interest, admin costs and collection fees. This leads to the debt collector collecting more than your initial payday loan amount.
It is important that you understand the role of a debt collector. They are tasked with collecting money and receive commission for every amount of money that they have collected, and they usually have no interest in your circumstances. Therefore, it is important that you verify any claims made by debt collectors. You have a legal right to a statement of the amount owed and how it was calculated. If a debt collector refuses to send you statements for an alleged debt, you have the right to complain to the Debt Collectors Council. You are also entitled to refuse to make any payments until they give you documents to support their claim. However, complete failure to pay your outstanding debt will lead to a negative credit score that could hinder your future financial plans.