Saturday, May 31, 2014

How Much Money Do Debt Collectors Make?

How much money do debt collectors really make?
If you're here then the odds are you've had issues with a collection agency at some time or another. And, like most of us, you've probably wondered how much money debt collectors make. After all, a person would have to be willing to berate and humiliate others for a living--surely the collection agency would have to offer an attractive salary to compensate, right? Not necessarily.

How Much Do Debt Collectors' Make Hourly?

All collection agencies have their own distinct compensation packages, but if you're a debt collector, you're a lot more likely to be paid by the hour than earn a predetermined salary--and the amount you earn will vary by a wide margin. Some debt collectors, for example, earn less than $10 an hour. That's little above minimum wage. You have to admire the irony of someone who knows exactly what its like to hardly make ends meet yet calls your inability to cough up hundreds (or thousands) of dollars nothing but "excuses."

Most debt collectors, however, earn somewhere in the neighborhood of $12-$15 dollars an hour. The job's low pay rate is partially due to the fact that, although the work is soul-crushing for most individuals, you don't need experience or a college degree to do it. You don't even really need much training which is a plus for the agencies because the collection industry has a very high turnover rate.

How Much Commission Do Debt Collectors Make?

Collection agents have the opportunity to advance their pay beyond their hourly wage by earning commissions on the debts they successfully collect. Surprisingly, the commission rate for most debt collectors is abysmal--often less than half a percent. Keep in mind that the collection agency itself is often working on a commission and the lion's share of the collected debt goes to the original creditor.

Let's be generous and say you're a debt collector whose commission rate is half a percent. Your
Debt collectors must often meet strict quotas.
quota for the month is $150,000. If you meet your quota, that leaves you with a take-home commission of $750. For some people, that's an entire month's rent or mortgage payment. It's certainly a healthy incentive for a debt collector to meet or exceed his/her monthly quota. The sad irony here is that, in many cases, debt collectors are clearly underpaid and then offered "incentives" like commission to make up for money they should be receiving anyway just to do their jobs.

The exception to the low-commission rule is the student loan collection industry. Student loan collectors who convince a debtor to make monthly payments over a certain percentage of the loan balance (and this number varies) will often receive either a hefty commission (15% or more) or a cash bonus for each successful deal.

How Much Do Debt Collectors Earn in Bonuses?

Although all collection agencies' policies differ, bonuses are a near universal component of the industry. The top collector for the month/quarter/year will be awarded a substantial bonus. Bonus amounts vary widely, but if a low hourly wage and pitiful commission rate doesn't motivate a debt collector enough, an extra $5-$10k almost certainly will.

I welcome any contributions from actual debt collectors who'd like to discuss their salary and job perks. I am willing to change your name to protect your privacy.


  1. "Let's be generous and say you're a debt collector whose commission rate is half a percent. Your quota for month is to collect $150,000. If you meet your quota, you'll be awarded with a commission of...drumroll please...$75. "

    1% of $150,000 would be $1,500 so half that would be $750 not $75.

    1. You are absolutely right. That will require a rewrite. Thank you.

  2. Lee, it a appears that you have never worked in the collection business based upon your assertions in the blog. I have been in the collections industry for over 25 years starting out as a collector and now own my own small agency and have for the past 10 years.
    You pretty much got the $10/hr base rate right but I have to disagree on your assertion that most agencies pay 1/2 of 1%. Once a collector reaches his collection goal which is usually determined by the hourly wage, the commission rate for the collector can range from 5-40% of the agency's commission on actual collections. Industry averages for medical collections, for instance, are generally 20-25% of accounts will receive a payment so collections is a numbers game. The more accounts that you have contact with the debtor, the better chance that a collector has to help the debtor figure out a way to pay the bill, either with a payment plan or payment in full. The vast majority of debtors WANT to pay their bills, they just feel overwhelmed or aren't aware of their options and a good collector will help them with their options. If a collector is not making at least $45,000 per year, they should look for another line of work.
    Collections is not soul crushing work nor do 99% of collector berate or humiliate the debtors that they come in contact with. The collectors that use unseemly tactics and are rude and abusive will not be successful in collections. Collections is just like sales, you buy from someone that treats you with respect and that you "like".
    Like any industry, the collection industry has it's unscrupulous bad actors, I know because I've been in contact with them. The collection industry as a whole provides a valuable service to society helping to keep our costs lower. Their is no such thing as an unpaid bill, those unpaid bills get added to the cost that consumers pay for their goods and services.

    1. I actually have worked for several collection agencies in crafting training materials to ensure that collectors don't inadvertently break the law while doing their jobs, but I've never worked in the actual call center. I interviewed several people who are either currently debt collectors or who have been debt collectors in the past. Unfortunately, a few bad apples can ruin everything. And of those bad apples, one girl was in tears telling me about her job. I have come to see over and over again that small, local collection agencies are almost always kinder and easier to work with than conglomerates. Every company is different, and every bit of information coming from actual collectors is important. Thank you for that.

      Any chance you'd be willing to be interviewed about your business to set the record straight on the most common stereotypes your company struggles with?

  3. Sure, I'd be happy to participate in an interview.

    1. All I need is your email address. Whatever you do, don't post it here (I have my fair share of crazies). If you could send it to me at we can proceed from there. And thanks again. :)

  4. if a debt collector is not making at least $45k you should look for a new line of work? or just a different agency to work for? i started in collections a little over a year ago... i had no idea what i was doing at first but quickly became one of the top collectors in my company... in fact i am ranked #1 overall right now out of almost 600 collectors and i barely make $40k... i feel drastically underpaid for my skill in the profession... i make $11.50 an hour and get roughly 20-25% in commission after i hit my quota... i might just need to look for a different agency?

    1. With your experience and your position as a top collector, consider looking for government collection work. Student loan collectors generally make quite a bit more than standard collectors. You're clearly good at what you do. If you aren't satisfied with what you're making, there are always collection agencies looking for talented help and some pay better than others. You know what you're worth, and with a little looking you should be able to find another collection company that knows it too.

  5. Marvin Smith I would like to talk to you about opening my own agency. Would you mind sending me an email address or a phone number?