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. A such, the successful implementation of these risk mitigation tools can reassure consumers that finance professionals follow the industry’s laws.
- Mortgage broker bonds protect homeowners against against mortgage professionals who use dishonest lending practices.
- Tax collector bonds can cover liability in the case of 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 through which consumes can gain compensation, surety bond regulations also function as a barrier to entry. They do so by keeping unqualified individuals from accessing positions through which they could potentially take advantage of consumers. Those with low credit scores, poor financial credentials or problematic work histories 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 finance industry surety bond as required by law can result in fines, legal action and even license revocation for the professional. This in and of itself typically exemplifies just how much government agencies value surety bond protection.