Given the increasingly unstable state of the economy, it’s no wonder so many instances of fraud and malpractice have emerged from the finance industry’s woodwork.
Fortunately, government agencies frequently mandate the use of finance industry surety bonds to regulate those who have access to others’ finances. As such, the successful implementation of these risk mitigation tools can reassure consumers that finance professionals follow industry laws.
- Mortgage broker bonds protect homeowners against mortgage professionals who use dishonest lending practices.
- Tax collector bonds can cover liability for uncollected taxes.
- Collection agency bonds keep debt collectors from infringing on consumers’ rights.
- Patient trusts bonds guarantee that nursing homes and other long-term care facilities manage patients’ finances lawfully.
Regardless of the specific type, these finance industry surety bonds provide consumers with financial guarantees through which they can recover losses resulting from the negligence of unethical professionals.
In addition to providing an avenue for consumers to gain compensation, surety bond regulations also function as a barrier to entry. They do so by keeping unqualified individuals from accessing positions in which they could potentially take advantage of consumers.
Those without proper experience, poor financial credentials or a problematic work history might not qualify for surety bonds at an affordable rate. An inability to become bonded when required by law keeps individuals from being licensed.
Furthermore, failing to maintain a bond as required by law can result in fines, legal action, and even license revocation for the professional. This typically exemplifies just how much government agencies value surety bond protection.
