Debt collectors typically charge 10-25% commission on what they collect, plus extra fees for setup, admin, and legal action. On a £5,000 debt, you could end up paying over £1,300 in fees, meaning you only keep around three quarters of what you're owed.
Standard fee structure
Commission: 10-25% of the amount collected
Additional fees:
- Setup: £50-£150
- Admin: £50-£150
- Letter Before Action: £100-£250
- Legal action: £300-£2,000+
Real-world example
£5,000 debt:
- Commission (20%): £1,000
- Setup fee: £150
- Letter fee: £200
- Total cost: £1,350
- You keep: £3,650 (73%)
"No win, no fee" sounds good, but...
Contingency arrangements charge even higher rates: 25-40% commission. So even if they collect the full amount, you only receive 60-75% of what you're owed.
Hidden costs nobody mentions
Relationship damage Aggressive tactics from debt collectors can destroy customer relationships. If you want to work with that client again, forget it.
Your time You'll spend 15+ hours managing the debt collector relationship, chasing them for updates, and dealing with complaints from your client.
Delays Debt collectors work slowly. The longer it takes, the less likely you are to recover anything.
No guarantees 40-60% of debts are never collected, even after you've paid setup and admin fees.
Why debt collectors are so expensive
Their business model requires high overheads: call centres, staff salaries, compliance costs, and profit margins of 30-50%. All of that gets passed on to you.
Here's the reality: most debt collectors just send letters and make phone calls (things you could easily automate yourself). They don't provide actual legal action, guarantees of collection, or protect your client relationships.
How Garfield compares
Garfield charges fixed, transparent fees that are recoverable from the debtor if you win, so it's effectively free. There's no commission, no percentage cuts, and no setup fees.
Time investment: 5 minutes to set up vs 15+ hours managing a debt collector
Success rate: 70-80% through court-backed action vs 40-50% for traditional collectors
What you keep: 100% of your recovery
Example: On £10,000 in unpaid invoices, a debt collector charges £2,000 (20%). With Garfield, you pay only £7.50 for your letter before action if you win and keep £9,992.5. That's £2,000 saved and 14.5 hours of your time back.