How commercial collection pricing works (contingency vs. flat-fee vs. hourly)

There are three ways a commercial collection provider can charge you—contingency, flat-fee per letter, or hourly attorney time—and only one of them ties the provider's paycheck to whether your money actually comes back. Contingency means no recovery, no fee: the agency earns a percentage of what it collects and nothing if it collects nothing. Flat-fee services bill per demand letter whether or not a dollar moves. Hourly attorneys bill their time regardless of the outcome. Here's how each model works, what it really costs, and why the pricing structure tells you more about an agency than any pitch on its homepage.

TL;DR: Contingency aligns the agency's incentive with yours—they only get paid when you do. Panther Chase charges 25% on accounts under 12 months past due, 33% over, 40% on second placements, negotiable on volume, with no setup fees and no hourly billing—and the same rate for international accounts as domestic. Flat-fee and hourly models get paid whether or not you recover.

What is contingency pricing, and why does it align incentives?

Contingency means the agency is paid a percentage of what it actually collects—no recovery, no fee. If nothing comes back, you owe nothing. That single rule aligns the agency's incentive with yours: the only way it earns is by putting real money back in your account, so it has every reason to chase the accounts that will pay and to be honest with you about the ones that won't. There's no upside for the agency in busywork. At Panther Chase the rate is 25% on accounts under 12 months past due, 33% on accounts over 12 months, and 40% on second placements, negotiable on volume. No setup fees, no hourly billing, no charge for accounts we don't collect.

What about flat-fee (fixed-fee) collection services?

Flat-fee—often marketed as "fixed-fee"—charges you a set price per demand letter, whether or not that letter collects a cent. The appeal is a low sticker price. The problem is the incentive: once the letter is sent, the provider has been paid and has no reason to do anything further. You're buying an activity, not a result. For a genuinely collectible account you may end up paying for a form letter that a real negotiator would have followed through to payment—and for a hard account you've spent money and still have nothing. The provider wins on volume of letters; you win only if the debtor happens to fold at the first notice.

And hourly (attorney) billing?

Hourly billing is the collection-attorney model: you pay for time—phone calls, drafting, filings—regardless of whether the debt is ever recovered. Costs mount whether the account resolves in a week or drags on for a year, and a debtor who can't or won't pay can run up your legal bill before you learn the balance was never collectible. Litigation has its place once negotiation is exhausted and a judgment would actually be collectible, but leading with hourly billing means paying for effort with no link to outcome. If you lose, you've paid twice.

How do the three models compare?

Why should international accounts cost the same as domestic?

Because the work is the same when the agency is actually built to do it. Many agencies charge up to 50% for international accounts—or decline them outright. That surcharge isn't pricing in risk; it's pricing in inexperience. An agency with no local reach, no multilingual negotiators, and no in-house legal capability doesn't know how to work a debtor overseas, so it either refuses the account or inflates the fee to cover its own failure rate. A good agency doesn't need to. Panther Chase charges the same contingency rate worldwide—25% / 33% / 40%—run through a London desk with local partners in 15+ countries. If your provider doubles its rate the moment a debtor is overseas, you're paying for what it doesn't know how to do. We cover the reasoning in depth in why international software receivables are gold, not garbage.

How do you know contingency is working for you?

By the results, not the invoice—because there's no invoice unless we collect. On claims over $5,000 placed under 12 months past due, Panther Chase recovers on 85.3% of accounts, at an average of 23.6 days to resolution. We're SOC 2 Type II, licensed and bonded in all 50 states, and every placement gets a free, honest evaluation within one business day—including the accounts we tell you aren't worth pursuing. That honesty is only possible under contingency: when we're paid solely on recovery, we have no reason to sell you effort that won't pay off. See our full services for how placement works.

Frequently asked questions

What does contingency collection cost?

You pay a percentage of what we actually collect—25% on accounts under 12 months past due, 33% over, 40% on second placements—negotiable on volume. There are no setup fees and no hourly billing. If we don't collect, you owe nothing.

Why is contingency better than a flat fee per letter?

A flat-fee service is paid whether or not it collects, so its incentive stops the moment the letter is sent. Contingency ties our pay to your recovery, so we're motivated to follow every collectible account through to payment—not just mail a notice and move on.

Do you charge more for international accounts?

No. We charge the same contingency rate worldwide. Agencies that charge up to 50% for international accounts are pricing in their own inexperience, not real risk. We work debtors in 15+ countries through our London desk at the same 25% / 33% / 40% rate.

How do I get a price for my account?

Send us the debtor details, invoices or contract, and a short history through Get Started. You'll get an honest, free evaluation within one business day—including whether the account is worth pursuing at all.