As a consumer, are you truly aware of what types of laws or bonds have been put into place to protect you?
At some point or another, most of the businesses you shop at are required to agree to a surety bond to legitimize their business.
So how exactly do these bonds affect you?
There are thousands of different bonds that serve different purposes, but the main reason behind bonds is to ensure the terms of a contract are carried out, as well as act as a deterrent from unethical business practices.
In most states, the most common type of license and permit bond that businesses are required to obtain range from:
- Auto Dealer Bonds
- Medicare Bonds
- Mortgage Broker Bonds
- Sales and Tax Bonds
- Contractor License Bonds
In a little more detail, surety bonds act as a promise from a surety company that the bond holding company will fulfill its duty to its consumer. A car dealer in most states, for example, will not be allowed to sell you, the consumer, a defective or faulty vehicle.
In this situation, a surety bond offers the reassurance and promise consumers expect when conducting a business transaction. See the example below for an in-depth analysis:
Alicia S. was on the market for a new vehicle and was preferably searching for a used car purchase. After seeing questionable reviews for a used car dealership near her home, she decided to give them the benefit of the doubt after noticing that they had a car available on the lot that she had been searching for.
Two weeks from purchase, Alicia’s vehicle broke down, and she was told by her mechanics that the car in actuality had way more mileage than was advertised, and the Car Fax report was faulty.
After taking the dealer to court, a claim was filed against the dealer’s surety bond, ensuring the consumer, Alicia, would be paid out in full for the faulty vehicle. The dealer was then held liable to repay the surety amount to its issuing agency.
In the event that a business transaction does not go as planned, surety bonds will guarantee that the responsible party will fairly and fully financially compensate the consumer.
Surety Bonds may offer a range of protections for consumers, but they also benefit business owners as well.
These bonds will allow a company of any size to establish trust with its customers, assuring them there is no need to worry about fraud or faulty products.
If you would like to learn more about how surety bonds benefit you or are a business owner looking for a quick and trust bond at a competitive rate, contact the team at Surety Bond Authority. 800.333.7800
