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Collection Agency Surety Bonds
What is a collection agency surety bond?
A collection agency bond protects the public against harm resulting from illegal or unethical practices. The bond communicates that your collection agency is under obligation to operate in an ethical and professional manner when collecting a debt from an individual or company. If your business operates in the state of Maryland, you'll know this type of bond as a “collection agency licensee surety bond."
Why do I need a collection agency surety bond?
Most states require collection agencies to be properly bonded before they can receive their business license. As a debt collector, you are operating a high-risk business; a surety bond helps you establish credibility and assists in ensuring compliance with industry regulations.
Your debt collector bond also protects consumers by allowing claims against the bond in the event that you are unable to pay a claim directly yourself. The bonding company will seek reimbursement for any claims paid by the bond.
How much does a collection agency bond cost?
The cost to get a bond for a collection agency varies from state to state and can also vary based on your credit rating. In general, premiums for most states range from $100 to $500, which covers bond amounts ranging from $5,000 to as much as $50,000.
| State | Bond Amount | Cost* (Annual Premium) |
|---|---|---|
| Alaska | $5,000 | $100 |
| Arizona | $10,000 - $30,000 | $100 - $350* |
| Arkansas | $10,000 / $20,000 / $25,000 | $100 / $200 / $250* |
| Colorado | $12,000 – $20,000 | Varies* |