Collection Agency Cost is a significant expense for many small business owners. Collection agencies are an integral part of the debt collection process, but they come at a high cost to businesses. The Cost can be challenging to understand without understanding Agency Fees and commissions.
What should I know about this?
Commissions are made up of two different fees:
– Collection Percentage Fee (CPF): This is a flat rate that the agency charges at each stage of debt collection, no matter how much work they do or how long it takes for you to pay off your debts. The average percentage of CPFs has increased from 23% in 1993 to 30% in 2013, which means more money out of your pocket every month!
– Contingency Fee: If you can’t afford full payment immediately, this fee will only be charged once the Collection Agency has successfully negotiated with your creditors and brought in a certain amount of money.
– Agencies often charge as much as 40% Commission on top of these two fees for their services, which can add up to thousands more than if you had just paid off your debts yourself without any help!
We hope this information has been helpful to you.
