Fees & Charges

Under the Debt Collection Act 2018 (DCA), debt collection agencies are legally restricted in the types and amounts of fees they can charge when collecting a debt on behalf of a creditor.

Commission Fees

If you enter into a repayment agreement with a debt collection agency, they may charge a commission fee of up to 20% of the original amount of the debt referred to them.

If you plan to set up a repayment schedule, Consumer Affairs recommends asking the agency to confirm:

• The original amount of the debt

• The commission fee being added

• The total amount you will owe, including fees

If you decide to pay off the debt in full with a one-time lump-sum payment to the creditor, the agency may charge a reduced commission fee of up to 10% of the outstanding debt.

Administrative Fees

Debt collection agencies may also charge administrative fees up to 2% of the original debt amount. These fees must only cover the actual costs of communicating with you during that particular month.

If an administrative fee appears on your account, you have the right to request:

• An explanation for the fee, and

• An itemised invoice showing the communication-related costs the agency incurred

• Validation of Debts

When a creditor sends your debt to a debt collection agency, the agency must send you a written notice that includes:

• The amount of the debt

• The name of the creditor

• A statement explaining that the debt will be treated as valid unless you dispute it within 30 days

• A statement confirming that if you dispute the debt in writing within 30 days, the agency must obtain and provide verification documents

• A statement confirming that, upon written request within 30 days, the agency must provide the name and address of the original creditor, if different
  

Once you dispute a debt, the agency must stop all collection activity until:

• They obtain evidence verifying the debt

• They confirm the name and address of the original creditor

• They send you the verification documents

It is important to know that not replying within 30 days does not mean you are admitting liability. However, if you delay, additional fees or legal steps may follow. If you miss the 30-day window, contact the agency as soon as possible.

If You Have Multiple Debts or Believe You’re Being Treated Unfairly

If you believe you are being charged improper fees or subjected to unfair debt collection practices, contact the debt collection agency immediately.

Consumer Affairs recommends:

• Call the agency and speak with a representative

• Follow up in writing (email or letter) to document:

• The date and time you called

• The representative’s name

• The issue you are experiencing

• What you are requesting (e.g., fee explanation, correction, verification)

• Include your account number and any reference numbers to help them resolve the issue quickly.

Keeping written records protects you if further action becomes necessary.