When you’re trying to recover unpaid rent or overdue invoices, one of the first questions you’ll face is cost. Debt collection isn’t just about results—it’s also about how much those results are going to cost you. That’s why many landlords and businesses turn to contingency fee collection agencies. But are they really worth it?
This post breaks down how contingency fee collection works, compares it to other models, and helps you decide if it’s the right fit for your property or business.
What Is Contingency Fee Collection?
In a contingency model, you don’t pay the collection agency anything upfront. Instead, they take a percentage of what they recover. If they don’t recover anything, you don’t pay.
It’s a performance-based system. The agency only earns when you do. For landlords and small business owners, this offers peace of mind—especially if budgets are tight or past-due balances are uncertain.
To see how this compares to other billing structures, check out Utilizing Contingency-Based Debt Recovery to Improve Your Cash Flow.
The Pros of Contingency Collections
The biggest advantage? Low risk. You can hand over your delinquent accounts without worrying about paying fees or hourly retainers.
Another benefit is motivation. A contingency-based agency has every reason to pursue collections aggressively—but legally and professionally—because their revenue depends on it.
Agencies like Advanced Collection Bureau (ACB) operate exclusively on a contingency model. This ensures we are fully invested in your recovery success and makes our service accessible to small and large landlords alike.
The Trade-Off: What You’ll Pay on Recovery
Contingency rates vary, typically between 25% and 50% of the collected amount, depending on the age and type of the debt. For example, a newer debt that hasn’t been to court may cost you less than an account that’s been delinquent for years.
But here's the reality: partial recovery is often better than no recovery. A 60% return on a $2,000 rent balance beats writing it off altogether.
That said, not all contingency agencies are equal. Some pad their fees with hidden charges, inflate balances, or report debts inconsistently to credit bureaus. At ACB, we pride ourselves on transparent pricing, ethical practices, and bi-monthly credit bureau reporting for stronger leverage.
For more on how that reporting improves outcomes, read The Importance of Regular Credit Reporting for Debt Recovery.
When Contingency Models Make the Most Sense
If you’re dealing with former tenants, ghosted invoices, or accounts you don’t have the time or tools to pursue, contingency makes perfect sense.
It’s also ideal if you:
- Don’t have legal expertise in-house
- Want to avoid court costs or litigation
- Need fast resolution without major upfront investment
If you’ve been burned by a flat-fee service or are considering a more results-focused model, check out The Benefits of Outsourcing Collections.
The ACB Difference
At Advanced Collection Bureau, our contingency fee model is backed by over 25 years of results. We use advanced skip tracing to locate debtors, handle all communication legally and respectfully, and report every active debt to the credit bureaus twice a month.
That means no up-front fees, no interest, no added stress. Just a clear, professional path to recovering what you're owed.
