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.




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How Much Money Do Debt Collectors Make?
How Much Money Do Debt Collectors Make?
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