Fair contingency-rate estimator

Frequently asked questions

What is a typical contingency fee for a collection agency?

Contingency fees are a percentage of what the agency collects. As a rough guide, fresh primary placements run around 18-25% and aged accounts often run 40-50% or more. Real rates depend on volume, paper type, balances and how many agencies have already worked the accounts.

Why do older accounts have higher contingency rates?

Older accounts are harder to collect, so an agency spends more work per dollar recovered. That's why rates usually rise from primary to secondary, tertiary and warehouse placements.

Is this estimate a quote?

No. It's a starting band from a published rule-of-thumb method so you can sanity-check offers. It's not survey data and not a quote from any agency.

Does balance size change the contingency rate?

Yes. Small average balances usually carry higher rates because each account costs about the same to work. Large balances usually carry lower rates.