What is a Colorado Collection Agency, Board Bond?
Learn what this bond is all about and how to obtain it!
As part of the licensure requirement stated in the Colorado Fair Debt Collection Practices Act, Collection Agencies who are applying for a license are instructed to procure a surety bond.
A Collection Agency is a firm or organization that is engaged in the business of collecting debt payments.
The agency directly or indirectly collects debts owed by delinquent clients or collects debts for the department of personnel.
What is the bond amount?
The bond amount is $12,000.
An additional $2,000 is needed for each $10,000 if the average monthly sum remitted during the previous year is beyond $15,000.
However, the bond amount should not exceed $20,000.
A blanket bond may also be filed as a substitute for an individual surety bond. The blanket bond amount is $2,000,000.
What are the bond conditions?
- The bond amount should be made payable to the Attorney General of the State of Colorado.
- The surety company that will issue the bond should be licensed by the commissioner of insurance.
- If the principal’s client files a claim – and the administrator finds it valid – that the money due is not paid, the principal has to fulfill that obligation by paying the client through the administrator.
- The principal should give the money collected to the client through the administrator minus the principal’s service fee.
- If a receiver has been appointed to manage the assets of the principal, a suit may be brought upon the bond in the name of the receiver.
- The client may still file for a claim regardless of the administrator’s compliance.
- Upon written demand, the principal will turn over to his client notes, valuable papers, or evidence of indebtedness.
- The bond will cover all matters during the license term, as well as renewal.
- A claim on the bond cannot be filed after the validity of the license has expired.
- The bond should remain valid until canceled. In the case of cancellation, a 30-day notice is required.
How can I obtain a Collection Agency Board Bond?
Submission of an application for the bond is the first step.
Once we have received your application, we will ask you to submit relevant information needed for the underwriting process.
An underwriter will evaluate your financial capability, business performance history, and your credit score. Those who have stellar credit scores may be eligible to pay for a very low bond premium or about 1% of the bond amount!
After the underwriting process is done, we will issue the bond and send it to you immediately.
Important Collection Agency Board Licensing Forms
- Collection Agency Licensing Application
- Surety Bond
- Notice of Address Change Form
- Collections Manager Change Form
- Personal Affidavit
- Out-of-State Trust Account Affidavit
- Citizenship/Lawful Residency Affidavit
Are you ready to start with your application? You may do so here!