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What do debt collection agencies charge, and are they worth it?

The short answer

Rarely, for one invoice. A 'no win, no fee' agency takes a share of what it collects, and no official source sets that share, so the quote is the only number that counts. An agency has no powers you lack: only an authorised enforcement agent can take control of a debtor's goods and sell them2, and posing as one without authority is an offence1. What the fee buys is someone else's time, which can pay off on a dozen small debts or a debtor you cannot trace.

Mara, WolfX research desk
Written with AI, checked by a person · 8 October 2026

England and Wales only. WolfX is software, not a law firm.

The numbers

What you hold before you pay an agency.

£40–£100Fixed sum the law adds to each late invoice, on top of interest.3

£35–£455Court fee for a claim up to £10,000. If you win, the court can order it repaid.7 6

Under 50Staff at your firm, with a larger customer: the Commissioner can help for free.10

What you can add

A £9,000 invoice, 69 days late: what an agency leaves you

Say a recruitment firm invoiced another business £9,000 for a placement, due on 31 July 2026. On 8 October it is still unpaid: 69 days late. Interest started on 1 August, so the rate is the one for debts that went late between 1 July and 31 December 2026: 8% over the Bank of England base rate4 of 3.75% on 30 June5, which is 11.75%. Say an agency quotes 15% of everything it collects, and the debtor pays in full. The 15% is an example to swap for a real quote: no official source sets what agencies charge.

The invoice£9,000.00
Interest: £9,000 × 11.75% ÷ 365 × 69 days4£199.91
Fixed sum (debts from £1,000 to £9,999.99)3£70.00
Agency share at an example 15% of £9,269.91−£1,390.49
You keep, if the debtor pays in full£7,879.42

Swap in your own quote: at 10% you would keep £8,342.92, at 20% £7,415.93. If the quote covers the invoice alone, the 15% share is £1,350.00, so ask what it applies to. Started yourself, the same claim costs a £455 court fee7, which the court can order the debtor to repay. The interest and the fixed sum3 are owed to you by law, with or without an agency. The £1,390.49 is the price of the hours you save.

The road ahead

Five steps. Free until you decide.

Step 1: Check the debt is clear
A clear debt is one invoice, no argument about the work, from a company still trading. If they dispute the work, sort that out first. If the company may be failing, check how close it is to going under.
Cost: FreeTime: 10 minutes
Step 2: Send your own letter before action
Court rules ask you to write first, and usually give a company 14 days8. A sole trader gets 30 days and a reply form: how to write one for each.
An agency's letter has no more force than yours: only a court rules the money is owed11.
Cost: A stampTime: 14 or 30 days
Step 3: If they are bigger, ask the Small Business Commissioner
With fewer than 50 staff and a larger customer, the Commissioner can help for free10. It calls an agency or a claim a last resort9. How it works.
Cost: FreeTime: 20 minutes
Step 4: Price the claim you could start yourself
The fee follows the amount you claim, interest included: £35 to £455 up to £10,0007. That is normally a small claim, where the court may order the loser to pay only a short list of costs, court fees included6; an agency's share is not on it.
The Act also gives you reasonable costs of chasing above the fixed sum3 but does not say what is reasonable, so do not plan on an agency's share being added to the debt. How a claim works.
Cost: Free to priceTime: 10 minutes
Step 5: Get quotes in writing, then compare
Send the email below to two or three agencies before any phone call, so each quote answers the same questions. Ask for the price in pounds on your invoice, whether it is a percentage, a fixed fee or both.
An agency earns its share when your hours are worth more than the cut: a pile of small debts, a debtor you cannot trace, no time at all. Read three terms twice: a charge when the debtor pays you direct, any fee before it collects, and who holds your money.
Cost: FreeTime: A week

A letter you can copy

Questions to put to an agency before you sign

Send it to each agency you are thinking of using, before you sign anything or hand over any papers.

New email

SubjectQuote request: unpaid invoice of from

Dear , I am comparing quotes to collect one unpaid invoice, and I would like your answers in writing before I decide. The debt: invoice , dated , for , was due on and is owed by . Where it stands: . Please tell me: 1. What do you charge, as a percentage or a fixed fee, and on what: the invoice alone, or the interest and fixed sum for late payment as well? 2. Is there any upfront, tracing, admin, exit or withdrawal fee? If so, how much, and when is it due? 3. If the debtor pays me directly, or I withdraw the debt, do you still charge? How much? 4. Who holds the money you collect, and how many days after it reaches you does it reach me? 5. Can you agree a lower sum or a payment plan without asking me first? 6. If a court claim is needed, who starts it, in whose name, and who pays the court fee? 7. What happens to the instruction if the debtor disputes the invoice? 8. Do you add any charge to the debtor's bill, and on what basis? 9. How long does the agreement run, and how do I end it? Please reply in writing by . I will not sign anything or send any papers before I have your answers. If any of my questions does not fit how you work, please tell me before that date and say what applies instead. Kind regards,

Tap a highlighted gap to see what goes in it.

Send it by email to two or three agencies, so every answer is dated and you can set them side by side. Keep the debtor's papers back until you have chosen. The questions need only the amount, the dates and who owes it. Count a dodged question as an answer. A term nobody will write down is not one you can rely on.

When not to bother

When it isn't worth it

One clear invoice from a company that can pay. A letter costs a stamp and a claim costs a fee that the court can order the debtor to repay6. An agency's share comes out of the debt, and the only thing you gain is hours.
They dispute the invoice. An agency cannot decide who is right; only the two of you, or a court, can. Ask for the part they accept by a date, and settle the rest between you: what happens when a client disputes an invoice.
The company is in liquidation. The law sets the order of payment12, so an agency cannot move you up it. Read what happens to your invoice before paying anyone upfront.
The client is worth keeping. The Commissioner says to weigh the cost and the effect on the relationship9. A polite reminder costs nothing.
The debtor is in Scotland, Northern Ireland or abroad. The court route on this page covers England and Wales only. A solicitor who does debt recovery there can price a claim, so an agency's quote has something to be set against.

The Wolf's note

An agency's letter looks like authority and carries no more than yours does. The fee pays for hours, not for powers. Put the share in pounds, put a price on your own hours, and sign only if the share is the smaller number.

Mr. Wolf · the AI inside WolfX

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