What Outsourced Collections Costs: Pricing Structures, Cost Drivers and How to Compare Proposals

Ask three providers what outsourced collections costs and you will get three numbers that cannot be compared. One quotes a monthly rate per dedicated agent, one quotes a price per account worked, and one quotes a percentage of whatever it recovers. Each number is honest on its own terms and useless against the other two, because each structure includes different work and pushes different costs back onto you.

This guide is for the lender, dealer principal, collections manager or CFO who has to put those numbers side by side. It explains the pricing structures used in the U.S. market, what each one includes and leaves out, the drivers that move any quote up or down, an in-house baseline built only from published federal data, and a method for comparing proposals on total cost of ownership rather than seat price. It contains no TEKS rate card and no invented vendor prices. TEKS prices each program from its solution design, and the point of this page is to make any proposal, ours included, legible.

The pricing structures in the market

Five structures cover nearly every proposal. They are not interchangeable. Each is built around a different unit of work, and the unit tells you what the provider is really selling.

A dedicated agent or full-time equivalent (FTE) is priced per person per month or per hour, for an agent assigned to your account only, working your queue on your hours. This is the structure used for first-party collections support, where the provider supplies capacity inside your systems rather than working accounts it holds. The price usually carries a team lead and quality review in a stated ratio; the question is whether it also carries the dialer, telephony and reporting, or whether those stay with you.

Per-account pricing charges for each account placed or worked in a period, sometimes tiered by delinquency stage. Per-seat pricing charges for a licensed position on the provider's floor whether or not a named person fills it. Both make the invoice predictable, and both hide the productive-hour question: how many accounts a seat can work depends on contact rates and stage mix. The Consumer Financial Protection Bureau's 2016 study of third-party collection operations found respondents attempting to collect on an average of between 1,000 and 3,000 accounts for each collector employed, a range wide enough to swallow any per-seat comparison.

Per-contact pricing bills each right-party contact, promise to pay or completed action. A blended per-hour rate bills productive hours across a shared pool at one rate whatever the task. Both reward efficiency and both need definitions written into the contract before the first invoice: what counts as a contact, what counts as a productive hour, and who measures it.

Contingency pricing is the third-party model. The CFPB's February 2023 market snapshot on third-party collections describes non-buyer debt collectors as often "paid on a contingency fee basis, meaning they keep a percentage of the revenue they collect and remit the rest to the creditor", with some "instead paid a flat fee based on placements or hours worked". Debt buyers, by contrast, purchase charged-off portfolios outright and keep everything they collect. The percentage is set by the age and quality of the paper, and the creditor pays nothing on accounts that do not pay. The 2016 operations study adds that large creditors typically place accounts with a firm for a limited period, "often six to twelve months", then recall them and place them with another firm or sell them.

Hybrids combine a base fee — a dedicated team or a per-seat minimum — with a performance component tied to cures, kept promises or dollars collected. They appear on late-stage first-party work and on any engagement where the client wants the provider to share some result risk without moving accounts to a third party.

What each structure includes and excludes

The seat price is the visible number. The invisible ones are the functions that either sit inside it or land back on your own payroll. Read every proposal against this list and mark each item as included, priced separately, or yours to supply.

• Management: the team-lead and manager ratio, whether they are dedicated or shared, and who on the provider's side you call at 9 a.m. when the queue is wrong.
• Quality review: how many calls per agent per week are scored, on whose scorecard, and whether coaching reaches the floor the same day. A price that includes quality review with no volume attached includes very little.
• Dialer and telephony: who owns the dialer, who pays per-minute telephony, and whether the Regulation F call-frequency presumption — no more than seven calls about a particular debt in seven consecutive days, and none within seven days of a telephone conversation about it (12 CFR §1006.14(b)(2)) — is enforced in the dialer or left to agent memory.
• Compliance monitoring: call recording and retention, scoring against the Regulation F communication rules — no contact before 8:00 a.m. or after 9:00 p.m. in the consumer's local time, cease requests honored, an opt-out statement in every text or email — complaint logging, and the audit access you get. The CFPB's 2016 study found that 44 of 58 surveyed collection firms had clients who audit their compliance with federal and state law. Expect to be one of those clients, and price the time.
• Reporting: what is delivered daily through launch and weekly afterward, and whether it shows behaviors (attempts, right-party contacts, promises kept, notes completed) or only outcomes.
• Spanish: whether bilingual agents are in the base price or a surcharge, and whether Spanish-language accounts receive the same cadence as English-language accounts.
• Hours coverage: the shift the price covers in your time zone, and the rate for evenings, Saturdays and holidays if you need them.
• Onboarding and training: system access, script training, the first thirty days of daily reporting, and whether that period is billed at the full rate.

The cost drivers behind any quote

Whatever the structure, seven things move the price. A provider that asks about all seven before quoting is pricing your operation. One that quotes without them is pricing a brochure.

• Delinquency-stage mix. Early-stage reminder calls are short and cure often; late-stage conversations are long, need arrangement authority and produce fewer dollars per hour. The mix is not static. The Federal Reserve Bank of New York reported that 3.00 percent of auto loan balances flowed into serious delinquency in the second quarter of 2026, up from 2.93 percent a year earlier, on $1.71 trillion of outstanding auto balances. A portfolio that is aging shifts hours toward the expensive end, and a BHPH portfolio starts there.
• Portfolio size and contact rates. Price per account falls with volume, but hours per cure rise as contact rates fall. The CFPB's 2016 respondents worked 1,000 to 3,000 accounts per collector; a queue of that depth with stale phone numbers produces attempts rather than conversations, and attempts are what you are paying for by the hour.
• Languages. Bilingual collectors are a smaller labor pool than collectors. A Spanish-language book that receives fewer attempts than the English one is a hidden roll-rate cost, not a saving.
• Hours of coverage. Evening and Saturday hours reach working customers and cost more per hour. A floor that runs on your clock prices standard coverage as standard; the TEKS operations floor holds Central Standard Time all year.
• System access and training. Working inside your DMS or servicing platform means role-based accounts, script training and onboarding time; the CFPB's respondents reported a training period of two to four weeks for new collectors. A provider that runs the work in its own tools and sends you exports is cheaper to start and costs you reconciliation every month.
• Compliance overhead. Recording, retention, scoring, complaint handling and audit support are labor. The CFPB's 2025 FDCPA annual report counted roughly 207,800 debt collection complaints in 2024; among complaints about communication tactics, 51 percent concerned frequent or repeated calls and 34 percent concerned continued contact after a request to stop. Both are behaviors that configuration prevents and monitoring must prove.
• Ramp. A dedicated team is slower in month one than in month three. Ask whether the ramp period is billed at the full rate, discounted, or measured against a productivity milestone.

The in-house baseline: an illustrative worked example

The alternative to every proposal is doing the work yourself, so every proposal should be compared against a loaded in-house cost. The example below is built only from published federal inputs and is labelled illustrative because it is: it uses national medians and averages rather than your payroll, and it leaves several real costs as line items without a number rather than inventing one.

Start with wages. The U.S. Bureau of Labor Statistics reports a median annual wage of $47,030 for bill and account collectors (occupation 43-3011) as of May 2025, with 158,830 employed nationally; the BLS Occupational Outlook Handbook shows the same median as $22.61 an hour. That figure is wages only.

Add benefits. The BLS Employer Costs for Employee Compensation release for June 2026, published September 9, 2026, reports that private-industry employers paid $46.89 per hour worked in total compensation, of which wages and salaries were $32.82 (70.0 percent) and benefits $14.07 (30.0 percent). Inside that 30.0 percent, legally required benefits — Social Security and Medicare, unemployment insurance and workers' compensation — were $3.40 an hour, 7.2 percent of compensation. For office and administrative support occupations specifically, the same release puts benefits at 31.3 percent of $36.73 an hour.

Apply the ratio. If benefits are 30.0 percent of compensation, they equal 30.0 divided by 70.0, or about 43 percent of wages. On a $47,030 wage that is roughly $20,156 of benefits and about $67,186 of compensation per collector-year. Using the office-and-administrative-support share of 31.3 percent instead gives about $21,427 and $68,457. Either way, the wage line is about seven-tenths of what the employer pays before anyone has been recruited, supervised or given a phone.

Why the unquantified lines are not small

The Occupational Outlook Handbook projects employment of bill and account collectors to decline 10 percent from 2025 to 2035 and still expects about 11,200 openings a year, all of them from workers who transfer to other occupations or leave the labor force. Against the Handbook's count of 160,200 jobs in 2025, that is about one opening a year for every fourteen positions: a recurring recruiting cost, not a one-time one, and one that falls on a shrinking pool.

Turnover compounds it. In the CFPB's 2016 study, the larger collection firms surveyed (more than 250 employees) reported annual turnover of 75 to 100 percent, while smaller firms reported relatively low turnover; every departure restarts the two-to-four-week training period and the ramp behind it. Supervision, quality review, the seat and the dialer are each a real cost that varies too much by operation to print a national number for. The right move is to put your own figures in those rows, not to leave them blank because a provider's proposal did.

Where contingency pricing fits, and where it does not

Contingency pricing is efficient for what it was built for: accounts you have charged off, or are about to, placed with a collection agency that works them under its own name with its own letters and systems and keeps a share of what it recovers. You carry no fixed cost, the agency carries the risk, and the percentage prices that risk. The placement cycle the CFPB's 2016 study describes — accounts assigned for a limited period, then recalled and placed elsewhere or sold to a debt buyer — is built around that trade.

It is the wrong structure for early-stage servicing, for three reasons. First, the unit of payment is dollars recovered, so the agency is paid to work the accounts most likely to pay and to leave the rest, which is the opposite of a first-party cadence that exists to keep every account current. Second, the agency works in its own name and its own systems, so your customer relationship, your notes and your data leave with the accounts. Third, a business that regularly collects debts owed to another typically falls within the federal definition of a debt collector at 15 U.S.C. §1692a(6): "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." The full Fair Debt Collection Practices Act and Regulation F travel with that status.

First-party collections support is a different purchase. You are buying capacity — agents who work under your name, inside your servicing platform, on your scripts and cadence — and capacity is priced per agent, per hour or per seat, not per dollar recovered. The same statutory definition excludes "any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor"; an outsourced team working under the creditor's name is not automatically inside that exclusion, and whether a given program is classified as first-party servicing or third-party collection depends on its structure and is determined with your counsel. TEKS runs every program to Regulation F operating standards regardless of that classification, and prices it on the capacity you buy.

What to demand in a proposal

A proposal you can compare has line items, service levels, reporting and exit terms written down. Ask for each of the items below in the document itself, not in a covering email. The compliance row is the one most often answered with "our agents are trained on it"; the right answer names where each control lives — the call-frequency presumption in the dialer, the 8:00 a.m. to 9:00 p.m. window checked against the consumer's local time, cease requests flagged on receipt, opt-out language templated into every text and email.

How to compare proposals on total cost of ownership

Seat price answers one question: what the invoice will say. Total cost of ownership answers the one that matters: what the program will cost you, all in, per unit of work you actually receive. Build it in five steps and run every proposal, and the in-house baseline, through the same sheet.

• Normalize to a productive hour. Take the monthly price per agent and divide by the productive hours the proposal commits to: shift length minus breaks, training, meetings and system downtime. A blended or per-seat price with no committed hours cannot be normalized, which is itself an answer.
• Add what you still pay for. If the team works in your dialer and telephony, price those minutes. Add your management time for the weekly review, your quality-review time if the provider's scoring volume is thin, and your onboarding time in month one.
• Add the ramp. Multiply the month-one and month-two productivity you expect by the billed rate. A provider that discounts ramp or measures it against a milestone is telling you it expects to reach one.
• Price the compliance gap. Where controls live in training rather than software, the behaviors behind 51 percent and 34 percent of the CFPB's 2024 communication-tactics complaints — frequent calls and contact after a request to stop — are left to individual discipline. That risk is a cost even when it is not a line item.
• Price the exit. A twelve-month lock-in with a ninety-day notice period is a cost you will pay if the fit is wrong, and data that lives in the provider's tools is a migration you will pay for on the way out.

Reading the sheet

Compare like with like: the in-house compensation figure above plus your own numbers for its unquantified lines, against each proposal's normalized hour plus what you still carry. The provider with the lowest seat price is often not the lowest on this sheet. The provider that asked the most questions in discovery is usually closest to it, because its price already contains your operation. When a dealership should outsource collections covers the capacity arithmetic that precedes any price, and BHPH collections best practices sets out the cadence a team should be handed on day one, which is the work the price has to cover.

How TEKS prices collections support

TEKS does not publish a rate card; pricing follows the solution design. A discovery call establishes portfolio size and stage mix, the systems the team will work in, hours of coverage, languages and reporting, and the proposal that follows lists each of those as a line item with the service levels and exit terms above. The unit is a dedicated bilingual agent, assigned to your account only, working under your name inside your servicing platform or DMS from the operations floor in Guadalupe, in the Monterrey metropolitan area, on your Central-time schedule, with contracting and account management through TEKS Solutions LLC in Arlington, Texas.

Programs are run to Regulation F operating standards whatever their legal classification, which is settled with your counsel, and are reported daily through launch. The collections support page describes the program and the Why TEKS page compares the model with hiring and with offshore alternatives. A consultation is where the solution design, and the price that follows it, begins.