What is a Pennsylvania Credit Service Organization Surety Bond?
In the Commonwealth of Pennsylvania, a credit service organization (CSO) is anyone who sells, provides or performs any of the following services in exchange for payment:
- Improving buyers credit record, history or rating
- Obtain an extension of credit for a buyer
- Provide advice or assistance in regards to either of the above items
Per the Pennsylvania statutes, a surety bond must be filed by any CSO that wishes to receive payment for their services before said services are complete. The bond amount requirement is equal to 5% of the total amount of fees charged to buyers by the CSO during the previous 12 months and shall not be less than $5,000 or more than $25,000. The CSO is required to adjust the bond amount once a year, no later than the tenth day of the first month of the organization’s fiscal year.
How does a Pennsylvania Credit Service Organization Surety Bond work?
Pennsylvania Credit Service Organization Surety Bonds guarantee that the CSO complies with the Credit Services Act and protects any person who is damaged by the unlawful actions of the CSO. If the CSO does not comply with the terms of the bond, a claim can be filed with the surety company. If the claim is valid, the surety will pay up to the penal sum of the bond to resolve the claim. The CSO is then required to reimburse the surety for all monies paid out, including any attorney fees incurred.
What are the terms of the bond?
Pennsylvania Credit Service Organization Surety Bonds are filed with the Pennsylvania Department of State Bureau of Corporations and Charitable Organizations, and renew on an annual basis with a continuation certificate. The bond can be canceled by the surety at anytime by giving a 30-days written notice prior to the effective cancelation date to the obligee. The aggregate liability of the surety will not exceed the penal sum of the bond in any event.
How do I get a Pennsylvania Credit Service Organization Surety Bond?
The first step is to complete our quick online application for your free bond quote. Submission takes only five minutes, and our underwriting staff will be in contact with you within a couple of hours with pricing.
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.
How much does a Pennsylvania Credit Service Organization Surety Bond cost?
Pennsylvania Credit Service Organization Surety Bonds are subject to underwriting and the price you will pay depends on a review of your personal credit report. Pacific Surety is proud to offer a variety of approvals, regardless of credit, with rates starting at 1% annually for well-qualified applicants. It typically takes just a few hours from quote to issuance of the bond, and we have the ability to beat any competitors pricing. If you have any specific questions, feel free to contact our knowledgeable underwriting staff.