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Contingent Commisions are used to prevent an undue conflict of interest between the wholesaler and the broker and to more accurately represent the economics of a transaction to avoid the tragedy of the commons. For example, in the mortgage brokerage business, an normal commision would be that broker gets a payment from the lender for selling the loan (note that this is really a virtual way of the borrower paying the broker to find the best deal). A contingent commision however would be that the broker only gets part of that amount, and recieves more payments contingent on the borrower continuing to repay the loan. This contingent payment helps incent the broker to carefully ensure that the borrower can really repay the loan. Otherwise, it would be in the broker's best interest to try and get a loan to as many people as possible, regardless of if they could pay. This would cause a tragedy of the commons and cause the price of the loans to increase, which makes all customers worse off.

Criticism of these commisions however arise when the contingent commisions are structured in a way as to have no real function except to be a way to allow the wholesalers to compete, not on the price to the consumer but to the fee paid to the broker. Competition in this realm thus only benifits the broker and creates a conflict of interest for the broker to decieve the customer into picking a higher priced product.

In 2004 Elliot Spitzer led an attack on the contingent commision practices in the industry. The attack was not so much on the practice in and of itself, but on the allegations that the insurance underwriters had an oligoply agreement between each other (not at will but caused by the immense influence of the largest brokers) to submit false prices to stifle real competition.