Massachusetts Collection Agency Bond

Why do Massachusetts collection agencies/debt collectors need to be bonded?

Massachusetts collection agency bonds are put in place to ensure that principals (collection agencies) account for all funds collected for the person, partnership, association, or corporation firm to which the funds are due. Specifically, these bonds ensure that principals comply with all requirements of Sections 24 to 28 of Chapter 93 of the General Laws.

If the principal fails to comply with these terms, the bond covers any financial losses that occur as a result of the principal’s actions, up to the full bond amount. The principal must reimburse the surety for all damages paid out.

Examples of terms that the principal may fail to comply with include:

• Fraud
• Theft
• Discrimination
• Overcharging customers or misusing their money in any way

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Considerations for the Massachusetts debt collector bond

Collection agency bonds in Massachusetts remain in full force as long as the principal remains in compliance with the terms of the surety bond contract.

These bonds must be acknowledged by a notary public.

How to start a collection agency in Massachusetts

Applications for company or branch licenses or company registrations of collection agencies in Massachusetts must be filed with the Massachusetts Division of Banks through the Nationwide Multi-State Licensing System and Registry (NMLS).

*Please note that paper license/registration applications are no longer accepted.

Steps to take:

1. Register with the NMLS.
2. Check the licensing and registration exemptions linked on the website.
3. Pay all applicable fees listed on the Massachusetts commonwealth website when registering.
4. Apply online or by mail.
   • Online submission may be done through NMLS

   • Mail submissions may be sent to the following address:

     Massachusetts Division of Banks
     Loan Originator Licensing
     1000 Washington Street, 10th Floor
     Boston, MA 02118
     

Take the first step toward becoming licensed in Massachusetts by purchasing the collection agency bond you need quickly and easily!