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.
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.
Some agencies will charge you for several other charges related to their collection efforts including fee-based background checks, court costs, filing fees, and long-distance telephone calls.
Before any collection agency will work even 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.
Be sure to read the contract 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 requiring you to sign 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.
Some agencies will charge you for several other charges related to their collection efforts including fee-based background checks, court costs, filing fees, and long-distance telephone calls.
Before any collection agency will work even 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.
Be sure to read the contract 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 requiring you to sign anything.
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If you want to know more about a Collection Agency or get free information from a Collection Company
posted by Debt Consolidation Loan at
9:07 AM
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