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How much will my Arizona collection agency bond cost?
The Arizona Department of Financial Institutions requires that all collection agencies post a surety bond. Arizona collection agency bond amounts are based on the agency’s gross annual income from the previous calendar year. The cost of this specific bond is heavily dependent on the applicant’s financial credentials.
If you are a new collection agency, and thus have no gross annual income from the previous year, your bond amount will be $10,000. A $10,000 collection agency bond is issued instantly and costs $100.
Why do I need this bond?
By posting an Arizona collection agency bond, principals (collection agencies) agree to abide by all rules, laws and regulations stated in the Arizona Revised Statutes, Title 32. Unlawful acts according to this title include, but are not limited to:
- failing to maintain a license
- aiding, abetting or receiving compensation from an unlicensed collection agent
- publicly advertising someone’s debts as a method of collection enforcement
- failing to pay any client after a collection has been made
- not making deposits into a local depository
- failing to keep accurate records of all monies collected
- failing to notify the Arizona Department of Financial Institutions within 10 days of any name change
If any of these rules or any other provisions found in the Arizona Revised Statutes are broken and a valid claim is made against the applicant, the surety will cover any damages up to the full bond amount. The principal must reimburse the surety for any and all monies paid out to consumers.
What’s the fine print?
Arizona collection agency surety bonds are continuous until canceled, and the obligee requires 30 days notice prior to cancellation from the surety.
The same bond form is used for several different business types, so be sure to indicate the appropriate license type when filling out the bond form. If an applicant needs to obtain a bond for more than one license type, he or she must do so by submitting separate bond forms.
How to become a collection agency in Arizona
To be legally licensed in Arizona as a collection agency, applicants must first:
- complete the appropriate application
- obtain a certificate of good standing
- submit a credit report
- furnish biographical statements and background checks of all top executive officers, members, partners and directors
Collection Agency Bonds Nationwide
Many collection agencies operate in multiple states, meaning they may be required to have multiple surety bonds. Get more information about other states’ collection agency bond requirements by selecting a state on the map below.