Debt collection is usually done on a contingency basis. This means that collection agents keeps a percentage of money that is collected. Depending on the size of the business, a collection agent's commission can range from 10% to 50% of the recovered amount, but are usually between 20% and 35%. If you want to see actual examples of what other BuyerZone.com users paid for collection services, check out our real-world collection agency rates article.

Some collection agents vary their fee depending on the age of the debt, charging less for 30-day old debts and more for those over a year, simply because they are more likely to be able to recover newer debts. The fee may go up if an account is passed from a collection agent to a legal action as well – fees of 40% to 50% are more common once the agency involves a lawyer.

It is important to balance the commission charged with the collection agent’s success rate. If you place a total of $10,000 worth of debt with an collection agent that has a 70% recovery rate and charges a 25% commission, you would collect a total of $5250. If you placed the same debt with another collection agent that only charges 10% commission but has a recovery rate of only 40%, you would only get $3600. Be sure to consider the recovery rate when making your decision.

The advantage of contingency billing is that you don’t pay for uncollected debts. However, some collection agents won’t offer contingency services for small debts. In these cases, you will typically pay a fixed fee for a series of letters or calls.