What Is the Typical Commission Paid to a Salesman in a Collection Agency?
Salesmen or collectors in a collection agency are generally paid a small base salary and a commission on debts they collect. The amount a salesperson is paid depends on the type of debt he collects, how old the debt is and how hard he has to work to collect it.
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Commission Structure
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The standard commission for a debt under 90 days old with current contact information for the debtor is 18 percent. The commission increases for older debt, and for debt with out-of-date or faulty contact information. The highest commissions in 2010 were about 50 percent, according to Michelle Dunn, author of "Starting A Collection Agency."
Company vs. Independents
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Commissions are generally deducted by the collection agency before it sends the balance of the money collected to the original creditor. A salesperson working for a collection agency will get approximately half of the commission, while the agency keeps the other half. To collect the whole commission, a person could become an independent agent. This requires a great deal of marketing and promotion to find clients.
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Considerations
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Debt collectors are either assigned a debt by another company, or they purchase the debts outright. If a debt is assigned, the collected amount belongs to the original creditor, and the collection agency keeps only the commission. If the agency buys the debt, it pays a few pennies on the dollar to the original creditor. Then any money the collection agency gets stays with the agency. The original creditor gets nothing more. A creditor will generally sell old debts that have little chance of being collected.
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References
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