How much does a collection agency bond cost in Minnesota?
The Minnesota Department of Commerce mandates that all collection agencies post a $50,000 surety bond. An additional $5,000 of coverage should be added for each $100,000 received by the collector from Minnesota debtors during the previous year. The exact cost of the surety bond depends on a review of the applicant’s credit score. Those with exceptional credit could pay as low as 1% of the total bond amount.
If you’re ready to get bonded, call SuretyBonds.com at 1 (800) 308-4358 or fill out our online bond request form. One of our expert surety specialists will contact you right away to walk you through the quick and easy bonding process and provide you with a free surety bond quote.
Why do I need this bond?
A surety bond for collection agencies is required by the state of Minnesota under the Fair Debt Collection Practices Act Chapter 332. A complete list of rules and regulations can be found in the Additional Resources section at the bottom of this page.
A collection agency surety bond ensures that the principal (collection agency) adheres to the regulations and standards of the state. Should a collection agency fail to adhere to these rules in such a way that causes verifiable financial losses to their clients, a claim may be made against the collection agency’s bond. The surety will cover the initial cost, but the collection agency must reimburse the surety.
What’s the fine print?
Collection agency bonds are in effect for a one-year term and must be renewed annually. The term may end sooner if there is a claim against the agency or it is cancelled by the surety. However, the surety must give 30 days’ notice to the Department of Commerce before the cancellation is can take effect.
How to become a collection agency in Minnesota
There are three separate types of collection agencies that are all required to obtain a $50,000 surety bond:
- Corporate Collection Agency
- Individual Collection Agency
- Partnership Collection Agency
Each separate surety bond form can be found in the Additional Resources section below.
To become a registered collection agency in Minnesota, an applicant must take the following steps:
- Fill out an application on the Minnesota Department of Commerce website, provided below in the Additional Resources section
- Pay $1,000 application fee
- Each additional branch of the collection agency requires a $500 fee
The Department of Commerce uses a system called ”Pulse Portal” for their applications. It is important to read through the step-by-step directions on their site in order to fill out the correct application.
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.
Or, choose your state from the list below:
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- Washington D.C.
- West Virginia