What is a Collection Agency Bond?

collection agency bondIf you own a collection agency, then your state may require you to purchase a surety bond before you are legally licensed to perform debt collections.

A collection agency bond is much the same as other surety bonds in that they serve as a guarantee that your company will perform its duties in accordance with all state and industry regulations.

If you are not sure whether your state requires you to have a collection agency bond, contact us today, and we will answer all of your questions and get you started with the bond process if you do need to obtain one.

 

How much does a collection agency bond cost?

Each state sets its personal requirements for the minimum required amount for collection agency bonds. You will only have to pay a percentage of the total bond amount for your premium. When you request a free quote for a surety bond, our agents can get you the most accurate and affordable quote quickly. Fill out the simple form today to get your quote as soon as possible.

 

How does a surety bond work?

In surety bonds like a collection agency bond, there are three entities: the principal, the obligee, and the surety. The principal is the business or individual that is required to purchase the bond. The obligee is the agency that requires a bond to be purchased. The surety is the company that serves as the underwriter for the bond.

If a consumer believes that funds were misappropriated by the collection agency, they can file a claim against the bond. The surety company will investigate, and if their claim is deemed valid, then payment will be made, not to exceed the amount of the bond. The collection agency is responsible for reimbursing the surety company for the amount that is paid out of the bond.

For answers to any more questions about collection agency bonds and to get started on obtaining one for your business, contact us today by requesting your free quote. We will work quickly to get your paperwork to you, and we are happy to assist you with any other required or optional surety bonds that your business needs.

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