A collection agency is a company that is usually considered high risk in several ways. Since they collect debts, they often have negative reputations among the general public. Moreover, the company constantly handles sensitive information including the customer’s personal details and financial details because of which a collection agency bond is a must. This surety bond provides credence and dependability to the bonded agency.
If you are looking to become licensed as a collection agency, then as a part of the state licensing requirements, the posting of a Collection Agency License Surety Bond may be required to operate within certain states. Unlicensed and illegally operating collection agencies may be penalized by the state and sued by the debtors they target.
Following are some of the frequently asked questions about Collection Agency Bond:
- What is a Collection Agency Surety Bond? : As with most of the Commercial Surety Bonds, a Collection Agency License Surety Bond is required as part of an individual states licensing requirements. The bond provides a financial guarantee that the licensed firm will comply with and abide by the laws and regulations of the particular state with regard to their particular license. This bond guarantees proper accounting for funds received, ensuring that the money collected by agencies will be properly dispersed to clients in order to settle the debt.
- How do I get a Collection Agency Bond? : The very first step for getting Collection Agency Bond is to apply for a free quote. Once you have been approved, your agent will provide you with the bond premium due, along with an agreement with the surety. Once you have paid for your bond and provided a signed copy of the indemnity agreement, your Collection Agency Bond will be mailed to you.
- How do Collection Agencies become licensed and bonded? : Firstly, you’ll need to contact the specific state department that oversees collection agencies about your desire to conduct business in that state. In addition to submitting an application to become registered or licensed, most states require a surety bond be posted to guarantee compliance with their collection regulations.
- Will my Collection Agency Bond work for multiple states? : No. You’ll be required to post a separate bond for each state that you will be conducting business in. Since each state has their own bond requirements, hence you’ll need to make sure to comply with each state’s respective bond regulations.