The Truth About No Win No Fee Debt CollectionLast modified: November 15, 2021
The Truth About No Win No Fee Debt Collection
We all know the term, “no win no fee”, as it suggests a consequence and cost-free arrangement. The appeal of this is undeniable, with a risk-free expectation.
Companies and private individuals in the UK are still in a precarious economic position, with many still feeling the effects of the Covid-19 pandemic. With this in mind, the need for an effective debt recovery solution has grown.
The number of professional debt collection companies that pitch themselves as providing “no win, no fee” services has grown. However, in practice, this is often far from the service that is actually delivered.
The perception with no win, no fee debt collection services is that the person owed money would initially pay nothing. Then, the agency instructed would work towards recovering the money. If the case was lost, the original creditor would not have to pay.
However, in reality, this is often quite different, and choosing to use a “no win no fee” debt collection agency can become very costly.
Looking at No Win No Fee Debt Collection
Many debt collection agencies advertise “no win, no fee” services, which obviously helps to draw in a lot of interested parties. For those that are looking for a low-cost and risk-free solution, working on a no win no fee basis is very attractive.
However, this is often simply a marketing tactic designed to get clients to engage with the agency in question. In some cases, new customers will be made to sign lifetime contracts which are very difficult to escape from.
In other cases, an agency advertising these services will be a front for a law firm. Once court action begins, the client can be charged hundreds of pounds for administration costs and court fees (per hour).
In many cases, legal action will achieve a county court judgment against your debtor. However, this still needs enforcing, which can inflate the cost of recovery even more.
As well as this, if the agency is able to successfully recover the debt., the commission and administration costs can be devastating. There are even documented cases of the fees amounting to nearly 3 times the value of the debt.
The Alternatives to No Win, No Fee Debt Collection
Those that are owed money, regardless of if it is a commercial debt or a private debt, need a robust and cost effective solution. The promise of “no win, no fee”, is initially very intriguing, but once you take the time to read through its many risks and pitfalls, it is clear that it is too good to be true.
Fortunately, instructing a well regarded and professional debt collection agency still enables businesses and private individuals to benefit from a low cost, effective solution.
Frontline Collections is one such agency, and we take every step necessary to ensure that we deliver the best service available. Our customers are always happy with the result we provide and we make sure that they are pleased with our service when they have received payment.
We are approved by the Credit Services Association (CSA), as well as winning awards such as the “Gold Preferred Supplier” award from the ISA.
Don’t be fooled by the promise of no win no fee debt collection. Please call our friendly debt collection experts today for a complimentary pre-action assessment of your debt.