Reducing debt-collection costs in Australia

The commission rates Australian agencies charge — generally 25–40% on recovered amounts — are not arbitrary. They reflect the labour-heavy unit economics of phone-room recovery. If you understand the cost stack, you understand both why the price is what it is and why it's now possible to do materially better.

Where the 25–40% comes from

A traditional commercial debt-recovery agency runs on:

  • Inbound + outbound phone teams (~50% of cost).
  • Letter generation + postage (~10%).
  • CRM / case-management licensing (~5%).
  • Senior collectors + escalation specialists (~15%).
  • Compliance, legal, overhead, margin (~20%).

The phone-room layer alone explains most of the contingency rate. To recover $1,000 of debt, an agency might spend 30–60 minutes of operator time across multiple touchpoints. That's $50–$150 of labour alone — before any of the other layers.

What changes with software-led recovery

Replace the phone room with a debtor self-service portal, automate outreach via SMS/email calibrated to the ACCC contact rules, and pipe payments through Stripe. The variable cost per debt drops by 80–95%. Recovery rates hold up because most debtors actively prefer settling online.

The contingency rate can fall accordingly. Adeva Plus charges materially less than the 25–40% market rate — see the side-by-side breakdown.

Per-debt economics, fast

Some quick maths. If you have 500 overdue accounts averaging $400 (so $200,000 in receivables) and your recovery rate is 60%:

  • Recovered: $120,000.
  • At 30% commission (legacy): $36,000 in fees → $84,000 net.
  • At a markedly lower contingency: net materially closer to the full recovery.

On a $200k portfolio, that's the difference between a salary's worth of finance team and not.

What to ask your current agency

Before switching, ask:

  1. What's your effective commission rate including any retainers / per-debt fees / letter charges?
  2. Do you charge if you don't recover?
  3. Can I see the rate card?

If they don't answer cleanly, the answer is informative.