What debt collection costs, and how attorneys and agencies charge

You've just received a quote from a debt collection attorney for R450 per letter, plus outlays. Another firm quoted a flat contingency of 15% of amounts recovered. A third mentioned "hourly plus expenses." You're left wondering: what am I actually paying for, and why do these numbers look nothing alike?

Debt collection costs fall into two broad buckets—fees and outlays—and understanding what belongs in each, and what gets left unspoken, is the difference between a reasonable quote and a nasty surprise.

What goes into the fee itself

The fee is the attorney's or agency's charged work. The structure varies sharply depending on how the collector operates.

Many attorneys bill per action: a demand letter costs one amount, a court application another, an appearance yet another. This model is transparent in theory—you see exactly what each step will cost—but it can incentivise lengthy correspondence before court action, inflating your total spend. A collector might send five letters when two would suffice, because each generates billable time.

Contingency fees—a cut of what they recover—align the collector's interest with yours but can be expensive. A 15% contingency on a large debt stings less than on a small one, which is why some collectors offer tiered rates (higher percentage for smaller amounts). The hidden cost here is that a collector on contingency may deprioritise claims they think will be hard to recover, even if you need them pursued for business reasons.

Hourly billing is rare in debt collection but does exist. It's honest in principle—you pay for work done—but gives the collector little incentive to work efficiently. A complex claim might genuinely warrant it; a straightforward letter demand rarely does.

Some agencies use a hybrid: a base fee per account plus a commission on recovery. This covers their costs while keeping them motivated to collect. Ask explicitly whether the fee applies whether they recover anything or nothing, or only if they succeed.

A cheap quote often omits mention of what happens if the claim goes to court. The initial fee might be modest, but once you're in litigation, costs spike. Some attorneys bundle court fees into a quoted rate; others bill them separately. A quote that doesn't break this out cleanly is hiding complexity.

Outlays and what they conceal

Outlays—court filing fees, sheriff's fees, postage, tracing—are usually claimed on top of the fee and are often the biggest source of sticker shock. Court fees are set by statute and unavoidable. Sheriff's fees for serving documents or executing a judgment are fixed by SHERPA or SLEA tables, depending on province. These are legitimate, but a good collector will warn you upfront that they exist and roughly how much they'll run.

Where cost opacity creeps in is "admin fees," "handling fees," or "bank transfer charges." These are sometimes genuine—WhatsApp communication, email, a basic spreadsheet—but they can also be inflated. A R50 admin fee per letter is standard; R200 is starting to look like padding. Ask for a breakdown of what these cover.

Tracing fees (finding the debtor's address or business registration) vary wildly depending on whether the collector has to hire a specialist or can do it in-house. A firm that does bulk work may absorb tracing into their overhead; a smaller practice might charge you for it. There's nothing wrong with that, but you need to know.

Some agencies claim "collection costs" on top of their fee and outlays, especially if they use third-party debt tracing or skip-tracing services. Again, this is legitimate if disclosed and itemised—fuzzy if buried in a line item called "costs".

A genuine quote will separate: attorney's fee (structure and amount), court/sheriff fees (estimated), specific outlays (tracing, postage, reporting), and admin or handling charges (if any). It will also spell out whether the fee is due upfront, on settlement, or monthly. If a quote is vague, that's your signal to push back and ask for detail before instructing.

When comparing collectors on Strove, look past the headline number. Request detailed fee schedules, ask how they handle court costs, and clarify what happens if settlement takes longer than expected or the debtor contests the claim. The cheapest quote often becomes expensive once you factor in what it doesn't mention.