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  • Writer's pictureFair Capital

Debt Collection Success Rate

Updated: Dec 28, 2023

Debt collection is an important aspect of financial management for businesses of all sizes in the United States. Whether you are a small business owner or a large corporation, recovering outstanding debts is crucial for the financial stability and growth of your business. However, choosing the right debt collection agency can be a daunting task, as not all agencies are created equal. One of the most important factors to consider when selecting a debt collection agency is its success rate.

What is the average collection rate for a collection agency?

The success rate of a debt collection agency refers to the percentage of debts that the agency is able to recover on behalf of its clients. This rate is a clear indication of the agency's effectiveness in collecting outstanding debts. The higher the success rate, the better the agency is at recovering the maximum amount of money owed to its clients.

According to recent statistics, the average success rate for debt collection agencies in the United States is around 20-30%. Therefore, it is reasonable to estimate that a typical debt collection agency will recover an average of $20-30 for every $100 in outstanding debt. A survey conducted by the ACA International in 2014 reported a 21.7% average industry-wide success rate.

Kaulkin Ginsberg Company's most recent debt collection success study, published in 2020, found that debt collection firms recovered nearly $102.6 billion in debt, representing 11.1% of face value. However, there are some agencies that are able to achieve a success rate of over 50%, which can make a significant difference in the amount of money recovered.

Result-driven - Fair Capital's collection success rate is currently 53.22% above the industry average.

(Based on the American Collectors Association's survey).

While the average success rate for debt collection agencies in the United States is around 20-30%, Fair Capital stands out with a collection success rate of 53.22% above the industry average.

Debt collection success rates
Debt collection success rates

Our results-driven approach and specialized expertise in various industries have enabled us to achieve exceptional results for our clients. In order to achieve a high success rate in debt collection, it's important for agencies to have a solid strategy in place. This includes having a team of experienced and trained professionals who understand the industry and know how to negotiate with debtors effectively. It also involves utilizing the latest technology and data analytics to identify the most promising accounts to pursue.

Debt collection

Liquidation rates by industry

Source: American Collectors Association 2012 & 2013 Survey

The survey calculated the liquidation rate by dividing a collection agency's gross amount collected during a 12-month period by the amount of new business placed over the 12-month period. The survey did not track the recovery of an individual account over the life of the account.

There are many factors that will affect a collection agency's success rates, but perhaps the most notable is time. Across the industry, the likelihood of write-off increases by approximately 1% with every passing week after the past-due date. Simply put, the recovery rate of accounts that are past due for longer than 6 months statistically drops in half. That likelihood drops to only about 25% after 12 months.

How We Consistently Achieve Superior Results

Let's be honest, collecting debts can be a tough gig. But when you bring a debt collection agency on board, you want to see them knocking it out of the park, not just keeping up with the crowd. That's exactly where we at Fair Capital come in. We don't just aim for "good enough". No, we're all about going above and beyond for our clients. Our leadership team, a group of smart cookies, is always on the ball, striving to make our winning streak even better.

So, how do we hit home runs so consistently? Well, it all boils down to our special three-step process for collecting debts.

First up, we start with what we call 'Soft Collections'. This is all about having a friendly chat with the person who owes the money. We find that starting off on the right foot can make a big difference in the long run.

Then, we ramp things up a bit with 'Standard and Intensive Collections'. This is when we really roll up our sleeves and get to work on securing the most we can for our clients.

But if all else fails, we've got a secret weapon - the option for legal action. It's our last resort, but when we need it, it's a game changer for making sure we deliver the goods for our clients.

At Fair Capital, we treat each account as if it's our only one. We know every penny counts, so we pour our energy into getting the most out of each case. We're not just about meeting standards, we're all about smashing expectations and delivering top-notch results. With Fair Capital, you're not just hiring a debt collection agency, you're teaming up with a success partner.

At Fair Capital, w𝗲 𝗱𝗲𝗹𝗶𝘃𝗲𝗿 𝗿𝗲𝘀𝘂𝗹𝘁𝘀 - our collection rate is currently 𝟱𝟯.𝟮𝟮% higher than the American Collectors Association average.

Maximize your results with Fair Capital

How much does an average collection agency collect?

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Disclaimer: Any and all information is not intended to be, nor is it, legal advice. Please consult your attorney for information concerning allowable rates of interest.

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