Debt recovery fees — fair or foul?

Can a debt collector add their fees to your debt? The short answer: only sometimes, only if disclosed, and the ACCC actively watches the space.

When recovery fees can be added

  • The original contract specifies that recovery costs are recoverable.
  • The amount is reasonable and disclosed in advance.
  • The fees relate to actual recovery activity (letters, court costs), not arbitrary loadings.

When they can't

  • The original contract is silent on recovery costs.
  • The fees are punitive rather than cost-recovering.
  • The fees weren't disclosed before being incurred.
  • The fees stack — "$50 per letter, $200 per call" — to amounts well beyond actual cost.

ACCC and the courts

The ACCC has taken action under the Australian Consumer Law against unconscionable conduct involving recovery-fee loading. Cases have involved:

  • Hidden "administration fees" added without prior disclosure.
  • Per-letter charges multiplied without proportional activity.
  • "Default interest" charged at rates not disclosed in the original contract.

What to look for as a debtor

  • Original contract — was a recovery-cost clause there?
  • Disclosure — were the fees notified to you in advance?
  • Reasonableness — does $300 of recovery costs reflect actual activity?

If any of these fail, dispute the fees. They're often the most-disputable component of a debt.

Adeva Plus approach

We charge contingency to the creditor, not extra fees to the debtor. The amount the debtor sees is the original debt, plus only any recovery costs that were specifically authorised in the original contract. No surprise loadings.