In this article
What you're buying, and what you pay for it
On a standard instruction you hand the agency a debt you still own, and it chases on your behalf for a percentage of whatever it collects. Athena Collections describes the common shape on its pricing page: "No Collection, No Commission", no upfront payment, "no contracts, monthly, or annual fees", commission "from 5%" and charged only on amounts actually collected. Its standard minimum instruction is £1,000, and below that a one-off handling fee applies alongside the commission. Additional costs come only with your written consent, set out in advance.
Two other shapes are on the market. Cosmo DCA sets out a fixed file-opening fee of £25 to £75 plus a smaller contingency rate of 6% to 10%, and a retainer arrangement negotiated quarterly for volume, pitched at 50 or more files a month or a ledger over £500,000.
Athena is explicit about what moves its rate: the age of the debt, the balance, your volume, whether the debt is B2B or B2C, the recovery stage and the likelihood of collection. Larger debts attract lower commission and smaller debts attract higher, the opposite of how most services price.
Why the published ranges disagree
| Agency | Published domestic range | How it's structured |
|---|---|---|
| Athena Collections | 5% to 25% | Contingency from 5%, rising on smaller and older debts. International 25% to 40% |
| Cosmo DCA | 8% to 35% | 8% to 15% under 90 days, 20% to 25% at 12 to 24 months, 25% to 35% at three years or more |
| Advocate | Nothing to you | Costs claimed from the debtor under commercial late payment legislation |
Look at where they part company. At the bottom you've got 5%, 8% and zero. At the top you've got 25% for domestic work, 35% for distressed debt and 40% for international. One agency's own domestic range spans five times its own lowest rate. And these are the numbers each firm chose to publish, so the private ones will spread further.
There's no rate card to check them against. The Credit Services Association publishes a Code of Practice its members must adhere to, with compliance declarations and annual credit checks, and it says nothing at all about price. So treat any "typical UK commission is X%" you find as somebody's marketing. Two or three quotes on your actual ledger will tell you more, and the shape both published ranges agree on is worth using as a sense check: commission rises with the age of the debt and falls as the balance gets bigger.
Instructing an agency, or assigning the debt
These are two different transactions and your customer experiences them differently.
On an instruction you remain the creditor of record. The agency acts for you, on commission. You keep the relationship, you keep the risk that nothing is recovered, and you keep the statutory entitlements below.
On an assignment, ownership moves. Section 136 of the Law of Property Act 1925 provides that an absolute assignment in writing, with express written notice to the debtor, transfers the legal right to the debt, all legal and other remedies for it, and the power to give a good discharge without your involvement. You're out of the chain. Your customer receives a written notice telling them a third party now owns what they owe you, and that document is the part they'll remember.
Factoring is typically structured as an assignment of the receivable, so it belongs on the assignment side of that line and not the agency side. We're going no further than section 136 supports here, because the mechanism is clear in statute and the commercial variants aren't.
What happens to your interest and the fixed sum
Once statutory interest starts running on a business debt, section 5A of the Late Payment of Commercial Debts (Interest) Act 1998 gives you a fixed sum on top: £40 where the debt is under £1,000, £70 from £1,000 to just under £10,000, and £100 at £10,000 or more. Section 5A also says that where "the reasonable costs of the supplier in recovering the debt are not met by the fixed sum", you're entitled to the difference.
That last limb is the statutory hook behind "free to the creditor". Advocate states that its commercial recovery service is "completely free to the creditor" and that "you never pay charges, commission or hidden fees", because "we claim those costs on your behalf and add them to the total amount payable by the debtor in accordance with commercial Late Payment Legislation".
Section 5A gives you an entitlement, and the reasonable-costs limb depends on what's reasonable in your case. No source we can point to confirms that a 15% commission is recoverable in full from a debtor as a reasonable recovery cost. So a no-fee model is a statement about how the agency prices its work, and not a guarantee about what you'll end up recovering. If the debtor pays the debt and disputes the add-on, you're the one holding that argument.
Two more mechanics matter here. Statutory interest and contractual interest don't stack: under section 3(3) a debt is treated as never having carried statutory interest to the extent a contractual right to interest is exercised, so you or your agency claim one or the other. And where a debt has been assigned, section 136 transfers "all legal and other remedies for the same", so our reading is that the section 5A entitlement travels with the debt to whoever now owns it. That's our reading of the two provisions together, and not a cited proposition. What is settled is that an assignee can use the insolvency route, since section 123(1)(a) of the Insolvency Act 1986 refers to a creditor "by assignment or otherwise".
Does the agency need FCA authorisation?
For a commercial invoice, generally no, and this is the cleanest fact on the page. Article 39F of the Regulated Activities Order defines debt-collecting as taking steps to procure the payment of a debt due under a credit agreement, a relevant article 36H agreement or a consumer hire agreement. The FCA's own guidance on consumer credit permissions spells out the exclusion: the activity "does not though include debts under agreements which are not credit agreements (or consumer hire agreements or regulated peer-to-peer loans), such as utility bill debts, or debts owed by companies".
So an agency collecting only unpaid trade invoices from businesses doesn't need authorisation for that work. One that also collects consumer credit debt does need it, for that part of its book. The practical consequence for you is that "FCA authorised" isn't the quality filter on a commercial instruction, and CSA membership isn't a substitute for it either, since the CSA's codes and standards page doesn't address authorisation or separate commercial from consumer debt.
The relationship cost
Nothing published by a regulator or a trade body describes what instructing an agency costs you in goodwill, so this section is reasoning and not evidence. It's still an input, and on a client you want next year it can be the largest one.
Two things are documented. If you assign the debt, your customer gets written notice under section 136 that somebody else now owns it, which is a permanent change in the relationship and not a chase. And if you instruct rather than assign, your name stays on the debt, so the agency's tone becomes your tone as far as your customer is concerned.
The question to sit with before you instruct is which of these accounts you'd want back if they paid tomorrow. On an account that's already finished, the commission is the only real cost. On an account you'd like to keep, the escalation is doing something the commission doesn't price.
When it's worth instructing one
| Your situation | Where the balance tends to fall |
|---|---|
| Debt of a few hundred pounds | Minimum instruction fees can outweigh the recovery. Athena's standard minimum is £1,000 |
| Fresh debt, solvent customer, no dispute | Contingency rates are at their lowest, and a letter from a third party sometimes settles it |
| Aged debt you've mentally written off | A quarter to a third of a recovery is worth more than the write-off you'd otherwise take |
| Debt in genuine dispute | An agency can't resolve a dispute. That's a conversation, or a money claim |
| Customer you believe can't pay | Look at the insolvency route and the statutory demand process instead |
| Client you intend to keep | Ask what an instruction costs you beyond the commission |
None of this is where recovery is easiest. The cheapest collection is the invoice that never goes overdue, and the payment mechanism usually matters more than the escalation. Clarity Counts, an accountancy practice, brought its average days paid late down from 40 to 4 within seven months of moving collection onto Adfin (Adfin platform data), against a UK small business average of 7.3 days late on Xero Small Business Insights data.
Common questions
There's no published standard. Athena Collections quotes 5% to 25% for England and Wales debts, Cosmo DCA quotes 8% to 35% depending on the age of the debt, and Advocate charges the creditor nothing and claims its costs from the debtor. No regulator or trade body publishes a rate card.
Some agencies price it that way, recovering their costs from the debtor under the reasonable-costs limb of section 5A. That limb depends on what's reasonable, and no source confirms commission is recoverable in full, so treat "free" as a description of the pricing model.
Not for commercial invoice debt. The FCA says the regulated debt-collecting activity excludes debts that aren't under credit agreements and "debts owed by companies". An agency also collecting consumer credit debt does need authorisation for that work.
On an instruction you still own the debt and pay commission on what's collected. On an assignment under section 136, ownership and the remedies transfer, and your customer receives written notice that someone else now owns it.
Yes, on an agency instruction the entitlement stays with you, and the fixed sum of £40, £70 or £100 applies as normal. You can't run statutory and contractual interest together, because exercising a contractual right displaces the statutory one under section 3(3).
Where your customer genuinely disputes the debt. An agency chases a debt that isn't in question, and a dispute needs either a conversation or a court to decide it.
Sources
This article explains how commercial debt collection works in the UK and it is not legal advice. Every commission figure here is a named agency's own published price, and prices change without notice. No source confirms that an agency's commission is recoverable from your debtor in full as a reasonable recovery cost, so check any agency's terms and your own entitlements before you instruct, and take advice where the debt is disputed or the sum is significant. Last updated August 2026.
