The basic model
Commission-only debt recovery is straightforward: Merion takes a percentage of whatever is actually collected from the debtor. If nothing is collected, you pay nothing. If $10,000 is collected and the agreed commission rate is 20%, Merion receives $2,000 and you receive $8,000.
The commission rate is agreed in writing before any work begins. There are no surprise fees and no invoices for phone calls that went unanswered.
How the commission rate is set
The rate varies with the age, size, and complexity of the debt. Debt age is the single biggest factor — older debts require more effort to recover and have a statistically lower likelihood of full recovery, so the commission rate is higher.
| Debt age | Typical commission range | Why |
|---|---|---|
| 0–3 months | 15–20% | Recent debt; debtor likely solvent and contactable |
| 4–6 months | 20–25% | Requires active follow-up and negotiation |
| 7–12 months | 25–30% | Extended effort required; lower recovery likelihood |
| 13–24 months | 30–35% | Significant work; debtor may be in financial difficulty |
| 25+ months | 35%+ | Very high effort; low success rate; limitation period may be approaching |
These are indicative ranges. The actual rate is confirmed after Merion assesses the specific account. Factors that can affect the rate include: whether the debtor is still trading, whether there is a signed credit agreement, whether a personal guarantee exists, and the total value of the debt.
What "recovery" means
Any amount collected from the debtor counts as a recovery — whether that is the full amount, a negotiated settlement, or a series of payment plan instalments. Commission applies to each payment as it arrives. If the debtor pays $3,000 on a $10,000 debt in month one and nothing more, commission applies to the $3,000 collected, not the $10,000 owed.
GST on the commission
Merion's commission is a taxable supply for GST purposes. GST at 10% is charged on the commission amount — not on the recovered debt principal. For example, if Merion collects $10,000 and the commission is 20%, the commission is $2,000 and GST is $200 — so the total withheld is $2,200, and you receive $7,800. The GST component is claimable as an input tax credit if you are GST-registered.
Comparing commission-only to other models
| Model | Upfront cost | Pay if nothing collected? | Incentive alignment |
|---|---|---|---|
| Commission-only agency (Merion) | None | No | Fully aligned |
| Solicitor (hourly rate) | High | Yes | Not aligned — billed regardless of outcome |
| Solicitor (conditional fee agreement) | None | No | Aligned (but rare in commercial debt recovery) |
| Self-managed legal proceedings | Court filing fees | Fees are non-refundable | N/A — your own time and cost |
Why it works in your favour
The commission-only model aligns Merion's interests with yours. We only earn a fee if we collect — so we assess every account before accepting it, and we do not take cases we do not believe we can win. This means you are not paying for effort on unrecoverable debts.
It also removes the common hesitation around engaging a recovery agency: the fear that you will spend money on a debt and still not get paid. With commission-only, the financial risk stays with Merion, not with you.
Is there anything commission-only does NOT cover?
In most cases, the commission covers all of Merion's work — calls, correspondence, negotiation, and standard recovery activities. However, if legal proceedings become necessary (e.g., filing in the Magistrates Court, engaging a process server, or instructing a solicitor), disbursements such as court filing fees and process server fees may be charged separately. These are always agreed in advance and in writing before being incurred.
Ask about disbursements at the outset. For most straightforward commercial debts, they do not arise.
Related tools: Commission estimator · Net recovery estimator