What is a Minnesota Collection Agency Bond?
A surety bond is needed by business entities who are licensed Collection Agencies in the State of Minnesota.
The requirement is enforced by the Minnesota Department of Commerce in compliance with § 332.34 of the Minnesota Statutes.
A Collection Agency’s duties include, but are not limited to, the following:
- Engages in the business of collecting claims owed to another person
- Indirectly or directly furnishes or sells forms to the debtor to collect claims owed to the creditor
- A person who uses a fictitious name or who presents himself or herself as a third person to the debtor to collect claims owed
- An individual or business entity that buys delinquent or charged-off claims for collection purposes
What is the bond amount?
The bond amount is $50,000 plus $5,000 for each $100,000 received during the previous calendar year from debtors located in Minnesota. However, the bond amount should not exceed $100,000.
The commissions earned by the collection agency from the said collections for the previous calendar year should be deducted.
Those who have excellent credit scores may qualify for a very low bond premium or just 1% of the bond amount!
Find out what you need to pay by getting your FREE quote here!
What are the Collection Agency bond conditions?
- The surety bond should be issued by a corporate surety who is authorized to conduct business in the State of Minnesota such as Surety Bond Authority
- The surety bond should be made payable to the Department of Commerce of the State of Minnesota
- The surety bond should be written on a form prescribed by the Commissioner of Commerce
- The Collection Agency licensee is obligated to comply with the provisions of § 332 of the Minnesota Statutes, the rules and regulations of the Minnesota Department of Commerce, and all the other applicable rules that govern collection agencies in Minnesota
- If the Collection Agency licensee commits a valid violation, the aggrieved party will be eligible to file a claim on the bond
How can I obtain this bond?
To secure this type of bond, the licensee or license applicant must seek the assistance of a surety bond company.
You will be asked to apply for this bond.
Once the application is received, the surety bond company will immediately process it. In our case, one of our expert surety bond agents will guide you through the whole process from the time you applied for the bond. We will make sure that you understand all the conditions before we issue the bond.
An underwriter will then evaluate your financial strength, job/business performance history, and your credit score.
Once the prequalification process is fulfilled, we will execute the bond and send it to you!
Ready to apply? Start here!