What Are Collection Agency Bonds?
A collection agency bond is license and permit surety bonds ensure that the collection agency operates in accordance with all applicable laws and regulations. They also protect the consumer against any unlawful or unethical use of their private personal and financial information gathered by the agency.
If the principal (collection agency) does not comply with the terms of the bond, a claim can be filed with the surety company for relief. If the claim is valid, the surety will pay up to the penal sum of the bond to resolve the claim. The principal is then required to reimburse the surety for all monies paid out, including any attorney fees incurred by the surety in the defense of the claim.
Who Needs A Collection Agency Bond?
Collection Agency Bonds, sometimes referred to as Debt Collector Bonds, are a type of surety bond for businesses and organizations that serve a third-party role in a business’s collection of funds or assets from a consumer. Since a collection agency is regarded as a high-risk business, only agencies which have obtained a Collection Agency Surety Bond are authorized to operate within their given state.
Which States Require Collection Agency Surety Bonds?
The majority of states require collection agencies to obtain a Collection Agency Surety Bond before they can be licensed to operate in their jurisdiction. The following are some of the more popular bonds that Pacific Surety offers:
Please contact your local authority for more information about Collection Agency Surety Bond requirements in your state.
What Is The Bond Amount For Collection Agency Bonds?
Amounts for Collection Agency Bonds are established at the state level, and are set by the laws and statutes regulating the collection agency industry in a given state. Therefore, bond amounts and requirements vary from state to state. Please contact us with specific questions, and our knowledgeable underwriting staff will assist you.
How Much Does A Collection Agency Surety Bond Cost?
Pricing for Collection Agency Surety Bonds varies by state. An underwriter will review your application, and your premium will be based on the following factors:
- The state requiring the bond
- Amount of the bond
- Term length of the bond
- Personal credit for all owners with at least a 10% ownership stake in the business
Individuals with good credit can expect to pay 1%-5% of the bond amount. Qualified applicants could pay as little as $500 annually for a $50,000 Collection Agency Surety Bond. To find out how much your bond is going to cost, please complete our online application for your free, no obligation price quote.
Can I Get A Collection Agency Surety Bond With Bad Credit?
Pacific Surety offers a wide-range of approvals, regardless of credit, for Collection Agency Surety Bonds. With our strong surety relationships, we have the ability to approve 99% of applicants, regardless of how bad their credit is. Our knowledgeable underwriting staff will work with you to ensure you receive the lowest possible pricing for your bond. Applicants with substandard credit can expect to pay 5%-10% of the bond amount in premium. To see what rate you will qualify for, please complete our online application for your free, no obligation price quote.
Where Are Collection Agency Surety Bonds Purchased?
The first step is to complete our quick online application for your free, no obligation bond quote. Submission takes only five minutes, and our underwriting staff will be in contact with you within a couple of hours with pricing. If you prefer to speak with our knowledgeable staff, please call 1-866-722-7873 and one of our Underwriters will assist you in applying for your bond.
After you receive approval, you must sign an indemnity agreement with the surety and provide payment for your bond premium. In most cases, we can issue bonds the same day we receive your signed documents and payment.