How does a Collection Agency get paid
One of the major benefits to working with a collection agency is that you only pay a fee if they successfully collect on the file you give them. This means if they can't collect your money, you don't pay a dime.
Notwithstanding, this isn't always the case. If you have a few smaller debts ranging form $10 - $500 each, the collection agency could require a fixed fee to handle those small accounts to make it profitable for them.
A Collection agency can earn its fee by taking a small portion of the money they successfully collect on. The percentage can range from 10% to 50% with the average being between 25% and 40%.
The amount the agency keeps is typically based on the age and the dollar amount of the claim. The older the debt the more difficult it is to collect and the agency will require a much higher fee to go after that debt. You should factor in how difficult it will be to collect. Certain debts are riskier to collect and therefore require a higher the percentage.
You may also be responsible for several other charges related to their collection efforts including fee-based background checks, travel, filing fees, and long-distance phone calls.
Before a collection agent works on a single claim, they will write up a contract that details the terms of your working arrangement including their responsibilities, the fees, any additional expenses, and customer service policies.
As with any contract make sure you read it over carefully for any fine print or contract language that seems confusing. If you notice discrepancies in the contract, make sure the agency fixes the problems immediately before asking you to sign it.
Notwithstanding, this isn't always the case. If you have a few smaller debts ranging form $10 - $500 each, the collection agency could require a fixed fee to handle those small accounts to make it profitable for them.
A Collection agency can earn its fee by taking a small portion of the money they successfully collect on. The percentage can range from 10% to 50% with the average being between 25% and 40%.
The amount the agency keeps is typically based on the age and the dollar amount of the claim. The older the debt the more difficult it is to collect and the agency will require a much higher fee to go after that debt. You should factor in how difficult it will be to collect. Certain debts are riskier to collect and therefore require a higher the percentage.
You may also be responsible for several other charges related to their collection efforts including fee-based background checks, travel, filing fees, and long-distance phone calls.
Before a collection agent works on a single claim, they will write up a contract that details the terms of your working arrangement including their responsibilities, the fees, any additional expenses, and customer service policies.
As with any contract make sure you read it over carefully for any fine print or contract language that seems confusing. If you notice discrepancies in the contract, make sure the agency fixes the problems immediately before asking you to sign it.
posted by Debt Consolidation Loan at
5:36 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home