How are collection costs calculated?

Within the topic of debt collection,  the question of how companies calculate the costs connected with the collection procedure are calculated (colloquially - and incorrectly - also referred to as dunning costs or dunning fees). The amount of the collection fees is established in art. 4 (5) RDGEG. As a result, collection costs in an amount of a comparable 1.3 fee (threshold fee). In accordance with this provision, the German Lawyers' Compensation Law (RVG) applies analogously to the activities of collection agencies. The collection costs are calculated based on section 13 (RVG) in conjunction with no. 2300 VV RVG and section 12 in conjunction with no. 7022 VVG RVG regarding expenses.

Which method do collection agencies use to calculate costs?

The collection agency of Arvato Financial Solutions calculates the collection costs accordingly; i.e. it asserts the usual costs.

The amount of the collection costs can be calculated precisely if we know the amount of the principal. The amount which a creditor demands from a debtor for services performed forms the basis on which the collection costs can be determined.

 

I do not understand why collection agencies charge collection costs?

The services which collection agencies provide cause costs. Incidentally, collection costs are legal costs which the creditor incurs as a result of the fact that the debtor is in arrears. The debtor has to compensate the creditor for this damage caused by such a delay.