How Much Do Debt Collection Agencies Charge? (Video)
A plain-English guide to commercial debt collection agency fees and the factors that affect them.
Chapters
Transcript
Meet Gordon. Gordon sells industrial pumps in Ohio. He's owed forty thousand dollars by a distributor in Lisbon, who has stopped answering emails and started answering yacht brokers. So Gordon asks the question everyone asks: how much does a debt collection agency actually charge? Most commercial agencies work on contingency. No recovery, no fee. When they do recover, they keep a percentage: anywhere from fifteen to fifty percent. For standard business debts, twenty to thirty-five is the usual range. So why the spread? Four things move the needle. One: age. A ninety-day-old invoice is a phone call. A two-year-old invoice is an archaeological dig. Older debt, higher rate. Two: size. Ten percent of a big claim is still real money. Forty percent of a small one barely covers the stamps. Three: geography. A debtor in another country means another language, another legal system, and people on the ground. That's usually priced in. Four: the stage. Letters and calls are normally covered by the percentage. Court is a different sport: court fees, local lawyers, and sometimes money upfront. So read the fine print. Is there a sign-up fee? A minimum fee per case? Do they take commission if the debtor pays you directly? And who pays if it goes legal? A cheap rate with expensive surprises isn't cheap. It's just shy. Here's the real sum. Thirty percent of something beats one hundred percent of nothing. And the longer Gordon waits, the higher the rate, and the lower the odds. So don't wait for the yacht to sail. Intercol works on no cure, no pay. If we don't recover, you don't pay. International debt recovery, with people on the ground. intrcl.com.