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Collection Agencies Fees & Rates | Collection Bureau of America

Collection Agencies Fees, Explained

Every business — regardless of size or industry — depends on prompt payment to maintain positive cash flow and, ultimately, to remain profitable. So when clients or customers fail to settle outstanding debts, it leaves the business in a precarious position. The amount owing has to be addressed, but it’s never pleasant to chase down overdue payments. Plus, it can be quite time consuming for companies to continuously reach out to debtors.

It can be extremely beneficial for a company to partner with a debt collection agency when it finds itself in this situation, yet many business owners are reluctant to make the commitment. The reason? They’re concerned about collection agencies fees — and rightfully so.

It’s typically not a good business strategy to spend more money when you’re waiting to receive compensation from delinquent customers. But if you partner with the right collection agency with the right debt collectors fees, it can be worthwhile. The key is to find a provider with a collection agency fee structure that aligns with your current and future financial needs.

Today, we’ll be providing answers to the most common questions we receive from clients regarding collection agency rates so you can make an informed decision.

How Much Do Collection Agencies Charge?

So what percentage do collection agencies charge? Fees can vary slightly from agency to agency, but with typical collection agency fees you can expect to pay between 25 percent and 50 percent of the amount collected (on average). If you’re looking to recoup high-risk debt, however, the amount you are charged will increase. Balances that have been outstanding for a year or longer and high commercial deficits are just a couple of examples of high-risk debt that may be more expensive to recover.

Collection Agency Fees: What is Legal?

There are three main collection agency fee structures that are legal in the United States:

  1. Flat Fees

Companies pay these collections fees upfront and in return, receive a predetermined number of services. As an example, a company might pay a flat $500.00 fee for 25 collection telephone calls, or $800 to send 150 collection letters via postal service. 

  1. Contingency Fees

A contingency fee structure is often referred to as “no results, no charge” payment plan. Essentially, the company pays the debt collection agency a percentage of any amount they successfully collect. 

  1. Blended Fees

Blended collection agencies fees combine a flat fee and contingency fee approach. The company pays a flat monthly fee in addition to a percentage of the total amount collected.

It’s also important to note that while there are no restrictions on how much a debt collection agency can charge, there are legal limitations on how much a business can charge a delinquent customer in fines, interest, or penalties.

If a customer owes $1,000.00 for unpaid cell phone bills, for instance, the phone service provider would not be able to charge $2,500.00 in penalties and interest, as this would be unreasonable in relation to the original balance.

Who Pays Collection Agency Fees?

The creditor, or the company who lent money to the consumer, is responsible for paying collection agencies fees as per their terms of service. The consumer (or the borrower) is never responsible for paying these rates, since it is the creditor who stands to gain from the collection of the outstanding balance.

How Are Collection Fees Determined?

There are several different considerations that affect collection agency rates. As we mentioned above, the level of risk associated with obtaining payment is one such factor. 

The collection agency may also factor in the number of times they’ll have to make contact with a debtor before a payment is received. If an insolvent customer ignores their calls and letters, they may require the company to pay an additional amount in order to continue pursuing payment.

In some cases, a company might be forced to take legal action in order to collect on a particular debt. There are debt collection agencies that offer legal collection services, such as advising companies during legal proceedings, referring them to trusted legal professionals, or handling additional enforcement actions, but these services are typically provided at an additional cost.

And last but not least, maximum rates can vary for collection fees by state, so your location may play a factor in how much you are charged.

It’s always a good idea to request fee structures from multiple collection agencies so you can find the ideal fit for your unique circumstances. Some agencies specialize in small-scale debts while others focus on major commercial accounts. Thoroughly reviewing your options is the best way to guarantee you are charged fairly.


Debt collection is uncomfortable, so leave it in the hands of the experts. Collection Bureau of America is a full-service debt recovery firm with experience in both business-to-business (B2B) and business-to-consumer (B2C) debt collections. We are licensed and authorized to collect in all 50 states. If you’re interested in partnering with an industry-leading collection agency, we’re confident we’re the right solution for you. Contact us today to learn more about our services.