One of the key benefits to working with most collection agencies is that you only pay when they successfully collect on a past-due account. This means if the agency can't collect money on your behalf, you don't owe anything.
However, this is not always the case. If you have some small accounts under $500, some collection agencies may require a flat fee to handle those accounts to make it worth their while.
A Collection agency earns its money by taking a small percentage of the money they successfully collect. This percentage can range from 10% to 50% with the most common percentage 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 agency will work a single claim, they will write up an account release form 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. - 15478
However, this is not always the case. If you have some small accounts under $500, some collection agencies may require a flat fee to handle those accounts to make it worth their while.
A Collection agency earns its money by taking a small percentage of the money they successfully collect. This percentage can range from 10% to 50% with the most common percentage 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 agency will work a single claim, they will write up an account release form 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. - 15478
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