Short answer: look for an agency that focuses on business-to-business debt, explains its fee in writing before it starts, holds your money in a separate client account and pays it over promptly, is registered with the ICO for data protection, reports progress clearly, and behaves lawfully and courteously. Check any regulatory permissions or memberships it claims on the regulator’s or body’s own register.
Choosing a debt collection agency for an unpaid business invoice is a commercial decision. You are trusting someone with your customer relationship, your data and, if things go well, your money. Agencies vary a great deal in how they work, what they charge and how they treat debtors. This guide sets out what to check before you instruct one, in plain terms.
Debt Collection UK is a trading name of PASECOM GROUP LTD. We are an introducer: we pass unpaid invoices owed by limited companies, LLPs and PLCs to independent partner agencies, who collect. We do not collect debts ourselves and we are not authorised by the FCA.
Does the agency specialise in business-to-business debt?
Commercial debt is different from consumer debt. The debtor is a company with an accounts team, a finance director and its own suppliers. The pre-action rules are different: for a company debtor the Practice Direction – Pre-Action Conduct and Protocols applies, while for individuals, including sole traders, it is the Pre-Action Protocol for Debt Claims. An agency that works mainly on business debts will know how to reach decision-makers, how to use the Late Payment of Commercial Debts (Interest) Act 1998, and when a dispute needs resolving before chasing goes further.
Is the fee clear and in writing?
Ask for the fee structure in writing before you instruct. Common models include a percentage of what is recovered, a fixed fee per letter, or a combination. Check:
- what percentage applies and to which sums (principal, interest, compensation);
- whether any fees are payable if nothing is recovered;
- whether there are upfront, administration or set-up charges;
- how direct payments to you, after instruction, are treated;
- what happens to the fee if the matter goes to court, and who pays court fees.
Through Debt Collection UK, there is no upload fee, and the fee is a fixed 15% of what is recovered, charged only when you are paid. The partner’s full terms are agreed with you before work starts. See business debt collection fees explained.
How will your money be handled?
Ask how recovered money is held and when it reaches you. A well-run agency keeps client money in a separate client account, not mixed with its own funds, and passes it on promptly with a clear statement. Ask how often remittances are made and what reporting you will receive.
What permissions and registrations should you check?
Collecting ordinary business invoices owed by companies generally falls outside the FCA’s regulated activities; FCA rules on debt collecting mainly concern consumer credit. So an FCA badge is not a requirement for a typical B2B file. If an agency says it is FCA-authorised, check it on the FCA Register and see what the permission covers.
Any agency handling your customer’s personal data, such as names and contact details of directors, should be registered with the Information Commissioner’s Office. You can check on the ICO register of fee payers. If an agency mentions a trade body membership, confirm it with that body directly.
How does the agency treat debtors?
How an agency behaves reflects on you. A good agency is firm, accurate and courteous. It does not:
- pretend to be a court, a court officer or an enforcement agent;
- send documents that look like court forms;
- threaten action it cannot take, such as taking goods without a court warrant or writ;
- contact the debtor’s customers or publicise the debt.
Only certificated enforcement agents acting under a court warrant or writ can take control of goods, under Part 3 of the Tribunals, Courts and Enforcement Act 2007. See what a UK debt collection agency can and cannot do.
What happens if pre-legal work fails?
Ask what the agency does if letters, calls and negotiation do not work. Can it refer the matter to a solicitor for a county court claim? Will it set out the likely court fees, which are banded by value on GOV.UK, and any legal costs, before anything is filed? You should always decide whether to go to court.
How will you know what is happening?
Clear reporting matters. Ask how you will be updated: email, portal, regular reports. Ask who your contact is, how quickly they reply, and how complaints are handled.
A simple checklist before you instruct
- B2B focus and understanding of company pre-action rules.
- Written fee terms, with no surprises.
- Separate client account and prompt remittance.
- ICO registration, and any claimed permissions verified.
- Lawful, courteous conduct towards debtors.
- A clear plan, with costs, if court becomes necessary.
- Regular reporting and a complaints procedure.
What questions should you ask on the first call?
A short conversation tells you a lot. Ask the agency what it needs from you to start, and how quickly it will first contact the debtor. Ask how it handles a debtor who says the invoice is disputed, and whether it will pause and tell you rather than pressing on. Ask how it treats a debtor that offers a payment plan, and whether it needs your approval. Ask who will sign its letters and what they will say. Finally, ask what it will not do. An agency that is clear about its limits is usually one that is careful about the law.
What are the warning signs?
Be cautious if an agency promises results, quotes success rates it cannot evidence, asks for large fees before doing anything, or suggests tactics that sound aggressive. Recovery is never guaranteed. A calm, accurate approach protects you as well as the debt.
Frequently asked questions
Does a debt collection agency need to be FCA-authorised for business invoices?
Generally not for ordinary B2B invoices owed by companies. Check any permission an agency claims on the FCA Register.
Can an agency take goods from the debtor?
No. Only enforcement agents acting under a court warrant or writ can take control of goods.
Should I pay an agency up front?
That depends on the model. Ask exactly what is payable if nothing is recovered. Through us, there is no upload fee and the 15% is only charged when you are paid.
Does Debt Collection UK collect the debt?
No. We introduce the file to an independent partner agency, which collects.
Ready to instruct a partner agency?
If the debtor is a limited company, LLP or PLC and the invoice is undisputed, upload it using the form below. We introduce it to an independent partner agency. The fixed fee is 15% of what is recovered, only when you are paid. Recovery is not guaranteed.