Many debt collection agencies provide a ‘no win, no fee’ debt collection service without an upfront fee. On the face of it, this looks like an excellent deal – what have you got to lose?
If the debt is collected, you’ll get your money back, less a commission levied by the debt collection agency, and if they don’t collect the debt, then you haven’t lost any more money.
So why do we charge an upfront fee for a No Win No Fee service? On the face of it, it makes no sense. Let’s look at things a different way.
A debt collection agency as with any other business has overheads and by operating a strict ‘no win, no fee’ they will be forced to do two things in order to sustain their cashflow:
- Keep their overheads low – they won’t be able to spend much time on your case
- Chase those debts that are likely to pay commission – the easy-to-collect debts.
In order to keep their overheads low they won’t employ legal executives to help resolve complicated disputes and they will follow a rigid predefined system for chasing debts – for example, a letter followed by telephone calls.
If your debt is straightforward then this may work, but what happens if their approach doesn’t work, what happens if your debtor raises a complicated dispute involving legal technicalities?
The answer is they give up, or as an alternative, invite you to resolve the dispute yourself or refer to a solicitor.
Or worse, you may be screwed over by unscrupulous debt agencies who don’t paint the full picture when advertising “no-win no-fee”, like these many case studies on the Legal Ombudsman site.
So, by choosing a debt collection agency that operates a strict ‘no win, no fee’ charging model you could lose money by failing to recover an outstanding debt that Master Collections could have collected.
Reputation for collecting debts where other agencies have failed
At Master Collections, we have a reputation for collecting debts where other agencies have failed. This is because you will have access to the services of a Legal Executive that will take the time to review each debt to determine:
- Whether the debt is collectable
- What is the best way to collect it?
- Resolve complicated disputes involving legal technicalities
Master Collections Approach to no-win, no-fee Debt Recovery
We focus on the outcome – successfully recovering outstanding debts. This takes time and careful planning, which cannot be done effectively under a strict ‘no win, no fee’ model, and that is why we make a nominal upfront charge for our services.
We are happy to review a debt and will always give an honest opinion as to whether it can be collected before charging any fees.
And our approach works. For example, a company owed £20,000 was told by the firm engaged to collect the debt that the money couldn’t be recovered as the debtor was insolvent.
It obviously wasn’t worth them investing any more time and effort, but more importantly they did not have the expertise to recover debt from an insolvent company.
Master Collections Legal Executive reviewed the case and was able to secure £10,000 of the outstanding debt. This was possible only because Master Collections could afford to put time and effort into a detailed investigation of the case with the appropriate expertise.
Our fee structure is totally transparent – we always outline the fees payable before commencing work and we keep you fully informed about progress.
Want to find out more?
Call award winning credit professional and commercial lawyer Carlo Pegna on 01920 481467 and find out what Master Collections can do for your business.