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How much does a collection agency licensee bond cost in Maryland?
Maryland collection agency bonds are typically required for $5,000 and cost $100 for 12 months of coverage. In some instances, the obligee may require the licensee to submit a bond in an amount larger than $5,000. These requests may still be approved for as little as 1%, but they are subject to underwriting before a final quote is provided.
Why do I need this bond?
The Maryland Commissioner of Financial Regulation requires collection agency licensees to obtain a minimum $5,000 surety bond prior to conducting business within the state. The bond is required to discourage unethical business practices within the industry.
In collecting or attempting to collect an alleged debt, a debt collector may not commit any of the following violations:
- use force or threaten violence
- threaten criminal prosecution
- disclose or threaten to disclose information about a debtor’s reputation or credit worth
- contact a person’s employer without any legal authority to do so
- abuse or harass the debtor
- use obscene or inappropriate language around the debtor
- claim, attempt or threaten to enforce a right which does not exist
What’s the fine print?
This obligation is continuous and must be renewed annually for as long as the licensee wishes to continue operating as a debt collection agency. If the surety wishes to cancel the bond for any reason, notice must be given to the obligee at least 60 days prior to the proposed date of cancellation.
Applicants are expected to be familiar with Maryland collection agency law. The applicable laws can be found in the Maryland Code, section 7-101.
How to become a collection agency in Maryland
The board reserves the right to revoke or suspend a license after the discovery of a violation of applicable laws or regulations. The suspension or revocation of a license does not exempt the principal from any claims filed prior to suspension.
The following information and materials are required for each applicant:
- principal officer information (list of names, addresses and phone numbers)
- true and correct statement of the business or employment history of each principal officer
- list of stockholders owning 10% or more of the company
- certificate of good standing from the Maryland Department of Assessment
- $5,000 surety bond
- trade name (if applicable)
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.