Telemarketing is the fastest growing industry today, and companies are using this to generate sales. Telemarketing is carried out over the phone and sometimes through web conferencing scheduled during the call. It includes both making sales pitches through direct phone calls or playing pre-recorded sales promotions over the phone. Many telemarketing companies in Los Angeles have mushroomed in recent years to cater to the increased marketing needs of small to large corporations.

Los Angeles has created a strong base and is considered to be a hub for telemarketing. The major business sector which supports telemarketing companies are telecommunications, finance, airlines, home improvement, etc.

What tops the list are telemarketing services such as sales lead generation, market research and surveys, database cleaning and updating, third party verification, record verification, telemarketing service fraud detection or prevention calls, continuity sales calls, airline ticketing and reservations, and any message delivery, to mention but a few.

But did you know that even phone soliciting professionals and telemarketing companies need to get bonded?

Here’s a brief guide for telemarketing professionals and why there is a need to secure a telemarketing surety bond in Los Angeles.

What is a Telemarketing Bond?

A Telemarketing Bond, also known as a phone solicitor bond or a telephonic seller bond, is a form of insurance that guarantees that telemarketers will abide by laws about them and act ethically with personal information and funds that they handle.

Since there are a large number of regulations that have recently been set to apply to telemarketers and the resulting difficulty staying in business, the exact expectations that are enforced vary depending on the specific legal language found on each bond form.

Who are the parties involved in a Telemarketing Bond?

Three parties are involved in every telemarketing bond that’s issued.

  • The Obligee is the state agency that requires the bond as a way to reinforce industry regulations.
  • The Principal is the telemarketing company or professional that purchases the bond as a guarantee that obligations will be completed according to the bond’s terms.
  • The Surety is the bond provider that issues the bond and backs the principal’s ability to fulfill the bond’s requirements.

Why is a Telemarketing Bond a requirement?

According to the California Telemarketing Law, it requires that telemarketing firms and telephonic solicitors maintain an active telemarketing bond. They usually have to purchase this type of surety bond before applying for or renewing a business license.

Bond costs specific to Los Angeles

Telemarketing bond costs vary considerably as the bond amounts and regulations are based on each license are established on a state level. For telemarketing firms in Los Angeles, you would need to post a $100,000 surety bond in compliance with the California Telemarketing Law requirements.

Telemarketing professionals might also need to obtain an additional surety bond if they offer a promotion with a premium of a market or advertised value of $500 or more. The required amount of this additional bond varies and is based on the total value of the premiums being offered.

Are there benefits to getting a Los Angeles Telemarketing Bond?

Telemarketing bonds offer protection to consumers and the state government in two ways: against insubordinate telemarketing companies that choose to ignore laws and against companies that accidentally break the law due to oversight.

Telemarketing bonds are subject to underwriting, so the best way to learn more about this type of surety bond is to contact a reputable surety bond company near you!

Greg Rynerson, CPCU

Greg Rynerson, CPCU

Backed by 30 years of experience, I spent my career in the surety bond and insurance industries. Throughout the course of my professional life, I've been proud to execute bonds at the state and federal level for various clients.

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