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A payday lender, while a legitimate credit provider, is not a legal authority. As such, there is no condition under which they can legitimately suspend any of your legal provisions such as licences and passports. This is just simply not allowed and any attempt to do so should be reported to both the financial and legal authorities.
While not legally entitled to suspend any licences, there are legitimate practices that lenders can follow, if recovery of debt becomes difficult, obstructed or even hostile. Steps that a payday lender is able to take are as follows: Application of missing payment charges and interest Each lender will have their own policy of how interest and late payment charges are applied to an account, but unless contact has been made to raise any concerns or request help with a loan, there will be charges applied in line with the particular lenders policy.
Contact Referees
If a lender has endeavoured to contact you to no avail, they may contact any referees provided to try and obtain information as to your whereabouts and contact information.
Take Funds directly from wages or bank
In most cases, a direct debit will be installed to ensure funds are taken automatically as part of your repayment agreement. Where a direct debit has been cancelled, the lender may in some cased freeze or take the funds directly from your wage.
Debt Collection
There are a variety of debt collection processes that a lender can take, from calling via phone, to visits from collections agents in the result of failing to pay back the loan over a length of time. Each lender will have their own policy for debt collection. While every provider has a duty to lend responsibly, a borrower also has a duty to this effect.
The different levels of debt collection will only come into effect if a borrower continues to ignore or avoid their lender. If you contact them and raise any difficulty then arrangements can almost always be made to understand and negotiate an affordable alternative to repaying your loan.
The worst thing you can do is avoid the debt in the hope that it will go away. Anyone finding themselves in a period of difficulty should contact their lender at the first sign that they cannot meet their repayments. They should also contact a debt advisor for professional assistance in getting their financial situation back on track.
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Other related questions:
Why do payday loan providers ask for references?
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