License & Permit
Collection Agency Bond
A license bond many states require from collection agencies, protecting clients and consumers if the agency fails to remit collected money or breaks collection law.
- Required by
- State banking, financial, or professional regulation agencies
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
The bond promises the state, and creditors or consumers harmed by the agency, that the agency will follow the state collection agency law and pay over money it collects for clients. If it does not, a harmed party can claim on the bond, often after getting a court judgment. The agency must repay the surety for any claim paid.
Who needs it
- Third-party collection agencies
- Debt buyers in states that license them
- Out-of-state agencies collecting from residents
What the underwriter looks at
- Owner's personal credit
- Agency financial statements
- Volume of client funds handled
- Complaint and regulatory history
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
How much bond do I need?
Each state sets its own amount. Illinois, for example, requires $25,000, and some states scale the amount to collection volume.
Does Alabama license collection agencies?
Alabama has no statewide collection agency license, but some Alabama cities require a local business license. Agencies collecting in other states often need those states' bonds.