CRSI provides a competitive rate structure for our clients. Our rates are based on a contingency commission basis, meaning “No Collection – No Fee!”
For each client the contingency fee is agreed upon in advance by the client and the agency. This is then detailed in a contract signed by both parties. The actual fee is dependent on a number of factors, such as:
- Volume of accounts assigned on a monthly basis
- Average balance due on each account
- Average age of the accounts at placement
- Type of account placed (apartment, utilities, bank, credit union, medical, etc.)
- Completeness of documentation provided with each account
- Additional information provided on each account
The contingency fee is only one aspect of the total cost associated with utilizing a third party collection agency such as CRSI. The percentage collected on all accounts assigned (liquidation rate), as well as the relative percentage of total assigned amount for each account, are also important factors in determining the overall success of an agency. The three of these working together generate the net dollars, or “netback” ultimately returned to the client. We are committed to maximizing the total “netback” to our clients on all accounts assigned.
Companies often choose a collection agency based on the contingency fee alone. This can very often result in a much lower net dollar return to the client.
Assume, for example, that a business has contracts with two collection agencies. Agency Y charges a 50 percent commission and has an account recovery rate of 30 percent. Agency Z, meanwhile, charges a 25 percent commission and recovers 18 percent.
Under the netback assessment, Agency Y shows a 15 percent netback rate, while Agency Z comes in at 13.5 percent netback. In other words, although Agency Y charges twice as much commission as Agency Z, its higher liquidation rate brings a greater overall return.
This means that for every $1,000 referred for collection, Agency Y will generate $150, while Agency Z will generate $135.