No, in most cases. You only have to pay debt collector fees if you agreed to them in the original contract or a court added them to your debt. Debt collectors often inflate what you owe by adding £250-£350 in fees that aren't legally enforceable.
What you legally have to pay
- The original debt
- Interest (if stated in your contract or awarded by a court)
- Court fees (if the creditor wins)
- Fixed legal costs (if awarded by a court)
What you DON'T have to pay
- Debt collectors' commission (typically 10-25%)
- "Administration charges" added by the collector
- "Collection costs" not approved by a court
- Any charges not mentioned in your original agreement
Example: What they claim vs what you actually owe
What the debt collector demands:
- Original debt: £1,000
- Collection fee: £250
- Admin charge: £100
- Interest: £50
- Total: £1,400
What you actually owe:
- Original debt: £1,000
- Contractual interest: £50
- Statutory compensation (B2B only): £40
- Total: £1,090
That's £310 less than they're asking for.
How to challenge debt collector fees
- Ask for a detailed breakdown of every charge they're claiming
- Offer to pay only the original debt plus contractual interest
- Stand firm: if it goes to court, judges often reduce or remove collector fees
- Negotiate: offer to pay the original amount immediately if they waive their fees. Many will accept rather than risk getting nothing.
If you're a creditor considering using debt collectors
Think twice before hiring a traditional debt collection agency:
- They charge 10-25% commission (£1,000 on a £5,000 debt at 20%)
- They provide no legal weight to your claim
- Aggressive tactics can damage your customer relationships
- Success rates are only 40-50%
Garfield is a better option: fixed recoverable fees (effectively free if you win), professional court-backed action with 70-80% success rates, and you keep 100% of your recovery instead of paying a cut to collectors.