Collections Agency Bond/Debt Collector Bond
Serving Dallas, Fort Worth, Carrollton, Arlington, Austin, El Paso, Houston, San Antonio, Irving, Plano, Grand Prairie and throughout Texas.
What is a third-party debt collector bond?
If you’re going into business as a debt collection agency, or an independent agency, you will need a debt collector surety bond.
Whether you’re a debt collector or work with a collection agency, bonds act as a legally-binding contract between three parties: the principal, obligee, and surety. The surety is the insurance company issuing the bond; the obligee is the government agency requiring you to be bonded; and the principal is the agency or individual who is purchasing the third-party debt collector bond.
The purpose of the third-party debt collector surety bond is not to insure you against losses for uncollectible debts, but to protect the general public by obligating you to comply with your state and/or local statutes pertaining to collection agency business practices and consumer debt regulations. The bond also protects debtors who incur financial losses resulting from violations of those statutes, up to the full amount of the bond.
Who is required to hold a third-party debt collector bond?
A third-party debt collector is a person who directly or indirectly engages in consumer debt collection. Attorneys who act on behalf of their clients don't count as third-party debt collectors, but you are considered one if you sell or offer to sell any forms, systems, or devices intended for collecting consumer debts.
If you count as a third-party debt collector, you are required to purchase a collection agency surety bond in the amount required by your state, county, or city.
How much does a debt collector bond cost?
Third-party debt collector bonds are among the most inexpensive in the surety bond business, usually around $100 if you require $10,000 or less in coverage. 85% of states will require this amount. The premium will be higher if you need more than $10,000 in coverage.
Third-Party Debt Collector Bond Application Process
Depending on the state which requires the bond, you may not need to submit your credit score to apply for $10,000 or less in coverage. However, having your credit report handy will help expedite the process, in the event we need it.
Our friendly and professional agents can be reached at (817) 590-9725 between 8:30a.m.-5:00p.m. M-F and you can also reach out to us through our online contact form 24/7, where a collection agency bond specialist will get back to you as soon as possible.
TMD Surety Bonds strives to make the bond application process as seamless as possible, and our surety experts are happy to answer any questions you have.
Call us today or apply online now!