When you're searching for a debt collection agency to help get back money you're owed, you might also come come the phrase "No Collection, No Commission", but what’s the difference?
On the surface, it may seem like both of these guarantees mean that you only compensate the agency if they successfully retrieve the money owed to you, but the two are very different.
No Collection, No Commission
Simply put, if an agency works on a “No Collection, No Commission” basis, it means they won't charge you their commission unless they manage to get back the money owed to you. But, keep in mind, this doesn't cover everything. Sometimes, they might need to do extra work, like finding the person who owes you money or taking legal steps. These actions might cost a bit extra.
A reputable debt collection agency will be upfront about any extra charges before they add them to your bill and will only go ahead with additional steps with your approval. This approach could actually save you money on commission because the agency isn't including these possible extra costs in their main fee. They charge for extra services only if, and when they're needed.
No Win, No Fee
On the other hand, the "No Win, No Fee" model may sound more appealing because it suggests you don't pay a penny unless they recover your money. But, there's a catch. Since the agency takes on more financial risk with this approach, they might charge you a higher rate for their services. Even though they claim to take on the risk, they may also include various extra expenses in this higher fee, making it costlier than the "No Collection, No Commission" option. While paying more doesn't guarantee they'll work harder to recover your debt, it does mean the agency covers their bases financially.
What About Retainers and Upfront Fees?
When it comes to paying fees upfront, it's good to be cautious. Some debt collection agencies ask for a retainer, a registration fee or request their commission upfront, but it's smart to check these companies out first. Paying early might make it harder to get your money back later as it could affect the willingness to get your money back.
However, if you're dealing with a small amount, a minor upfront fee is generally not a big deal because the agency has its own costs to cover. Always make sure to read the fine print to avoid any surprises.
Lastly, it's important to remember that if it’s a business that owes you money, debt collection agencies can try to recover all of their costs back from that business, not from you. Keeping these points in mind can help you make informed decisions about paying a debt collection agency, ensuring you stay protected and informed throughout the process.
How We Operate
Redwood Collections is proud to operate on a “No Collection, No Commission” model with our clients at the heart of everything we do. We value transparency and open communication, making sure that you're fully informed and comfortable with our process. We believe in making a real difference to our clients by recovering what's rightfully theirs, without adding unnecessary stress or cost.
As part of our commitment to transparency, we make all our clients aware of our £50 handling fee for smaller debts under £500. This fee covers the admin costs involved in managing and pursuing these smaller amounts. It's important to us that our clients know this upfront, so there are no surprises down the line.
Our approach is designed to be as fair and straightforward as possible. We're here to support your business, not to add to your burdens. That's why we only charge this handling fee when dealing with smaller debts, ensuring our services remain cost-effective for you, regardless of the debt size.
Contact us to find out how we can help your business Grow Stronger.
