Flat Rate vs. Tiered Rate
Our commission is a flat percentage of the amount we collect on an account. It does not vary no matter what the account balance is or what we have to do to collect it. Many other collection services use tiered rates that vary under different circumstances. A typical tiered rate structure will involve a low initial collection charge, but the rate will increase, often quite significantly, for lawsuits. There may be other factors, such as low balance, out of the area or "skips" that trigger a higher rate. While the lowest rate may be emphasized when discussing the charges for collection services, the overall blended rate, the total commission charged as a percentage of the total amount collected, may be surprisingly high.
To start a lawsuit it is necessary to pay docket and service of process fees. The question is who pays the costs if the account is not collected after a lawsuit, which happens all too often. In Colorado, attorneys must make their clients pay for these fees. Collection agencies are allowed to pay these fees, but some agencies pass some, if not all, of these costs on to their clients. These charges can significantly affect the fee for the collection of your accounts. Continental pays the court costs on all lawsuits even if we collect nothing on the account.
On most collection accounts, interest may be added to the principal claim amount. Continental charges the same commission on interest collected as principal collected. Some collection services keep all interest collected. If you do not receive a percentage of this interest, it is the same as paying a little extra for collection services.
Some collection services will charge their clients to return an account. This charge can be a set amount or a percentage of the account balance. It is important to evaluate the circumstances in which you are allowed to ask for your accounts back, and whether there will be a charge. We do not charge for returned accounts nor do we have other types of hidden fees.
Gross Amount Collected
No matter what system is used to determine the collection agency's or attorney's commission for the collection of the debt, it is crucial to make sure you have selected an agency or attorney that has the expertise and will put in the effort necessary to make sure the highest possible percentage of your accounts pay. A low commission rate is no bargain if the agency is simply "creaming" the accounts, and ignoring all the hard cases. Check out references and collection statistics to make sure you have selected an agency or attorney with a proven track record in your area of business.