Define: Collection Commission

A collection commission is a fee charged by a collection agency for their services in collecting outstanding debts on behalf of a creditor.

The collection commission is typically calculated as a percentage of the total amount collected. The specific percentage may vary depending on the agreement between the collection agency and the creditor.

Yes, collection commissions are legal as long as they are agreed upon in a contract between the collection agency and the creditor.

In most cases, collection agencies only charge a collection commission if they are successful in collecting the debt. However, it is important to review the terms of the agreement with the collection agency to understand their specific policies.

Yes, collection commissions can be added to the outstanding debt and become part of the total amount owed by the debtor.

In some cases, the collection commission may be negotiable. It is advisable to discuss this with the collection agency before entering into an agreement.

Yes, a debtor has the right to dispute the collection commission if they believe it is unfair or unreasonable. They can raise their concerns with the collection agency or seek legal advice if necessary.

Collection agencies may charge additional fees for specific services, such as skip tracing or legal action. These fees should be clearly outlined in the agreement between the collection agency and the creditor.

In most cases, the debtor is not directly responsible for paying the collection commission. The commission is typically deducted from the amount collected by the collection agency before remitting the remaining funds to the creditor.