How much does a collection agency bond cost in Michigan?
The Michigan Department of Licensing and Regulatory Affairs requires collection agencies a surety bond in varying about for various reasons.
- First-year agencies - $5,000 bond
- Repossession companies - $10,000 bond
- Companies with 2 or more years of experience - bond ranging from $10,001 — $50,000
Michigan collection agencies in their first year or those structured as a repossession company can purchase a $5,000 or $10,000 surety bond for just $100 for a one-year term. Save time and money on your surety bonds by purchasing then with a multiple-year term up-front with a 25% discount!
Collection agency bonds in an amount ranging from $10,001 to $50,000 are subject to underwriting consideration, where a surety underwriter will review the applicant's personal and financial history to determine if a bond can be issued and at what premium.
Fill out a bond request to get a free quote.
What is a collection agency surety bond?
According to Section 339.901 of the State of Michigan Legislature, a collection agency includes a person representing himself or herself as a collection agent or a person acting on behalf of a collection agency.
Michigan collection agency surety bonds hold the principal (collection agency) accountable for the reporting of accurate records of the accounts that he or she is collecting on. This specific bond also guarantees that collection agencies will not divert collected debt payments to unauthorized accounts or misuse any monies they have acquired for their clients. This bond also ensures that collection agencies will not engage in any activities associated with debt management companies or real estate brokers.
Michigan collection agency surety bonds are continuous in nature. The surety company must provide the Department of Licensing and Regulatory Affairs with 30 days’ notice prior to cancellation.
How to become a licensed collection agency in Michigan
According to Article 9, Act 299 of 1980, all applicants must meet the following minimum criteria:
- Have a high school diploma, G.E.D or demonstrate to the
- Satisfaction of the department that the applicant possesses the equivalent of a high school education
- Have had at least 6 months of full-time experience in the business of account collection
- Is at least 18 years of age
- Is of good moral character, to be determined by the department
Applicants trying to get licensed as a collection agency are required to take the following steps:
- Establish if you are a owner manager or a non-owner manager
- Promise to operate your business fairly and lawfully
- Provide proof of purchase of surety bond
- Complete the Collection Agency Manager Application
- Pay mandatory fees
- Upon approval of your application, you will be required to take the Collection Agency Manager Written State Examination proctored by PSI Exams
Each branch must furnish its own license for each separate physical location.
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.
