Survey says

Moses, Max G

In this issue, some results on the topic of rates will be sum from the survey conducted by Resource Management Services, Inc.

Overall, nearly four out of five credit granters indicated that they have the same rate structure with each of their agencies to whom they give similar work. When it came to rates paid to attorneys, three out of four used the same rate structure. However, in comparing agencies and attorneys, nearly 40% reported having different rate structures between agencies and attorneys. The segment of creditors most likely to deviate from the average response were in those in the areas of utilities (where nearly half reported having different rate structures) and those in the medical collections areas (where none reported any disparity in the rate structures). Among those creditors identifying themselves as primarily commercial, half said that they have the same rate structure among agencies while one-third indicated using the same rate structure among attorneys.

Nearly half of the respondents indicated that when dealing with agencies, their fee structure is variable by the level of placement (for instance, prime or seconds) and 37% responded that they have a fixed fee/rate on all accounts. However, nearly 61% reported having a fixed fee/rate on all accounts when dealing with attorneys. A distant second at 17% was a fee structure that was variable based on the law firm involved.

One third responded that their agency fees never increase with legal effort. However, over 43% stated that their fees always increase when legal effort is needed.

Over 60% reported that their attorney fees never increase with legal effort, compared to about 14% who responded that they always increase.

Survey Background

The study was conducted by Resource Management Services, Inc. and was distributed to over 2,000 recovery professionals throughout the United States and parts of Canada who are involved in collection agency and/or collection attorney management. There were 280 questions in the survey; 5 percent of the recipients completed the survey.

A complete copy of the study is available at a cost of $289 plus shipping/handling from:

Resource Management Services, Inc. 10440 Pioneer Boulevard, Suite 2 Santa Fe Springs, CA 90670-3742 Phone: (562) 906-1101 Fax: (562) 906-1212 Debt Collection Practices Act liability for attorneys and other collecting for check cashers, landlords, condominium associations and car rental agencies. Sizeable tort damages for collectors’ telephone abuse.”

What is the hottest area? According to NCLC it is: “The least recognized serious consumer problem today is illegal utility terminations and landlord utility shutoffs. Add this to telephone and other utility marketing abuses, and this makes consumer challenges to utility practices one of the hottest areas around.”

Copyright Commercial Law League of America Sep/Oct 1998

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