How much does a collection service license bond cost in Tennessee?
Debt collection services in Tennessee must post a surety bond prior to conducting business as a licensing requirement.
The required bond amount is based on the number of employees the collection service employees and are as follows:
- 1-4 employees: $15,000 surety bond
- 5-9 employees: $20,000 surety bond
- 10+ employees: $25,000 surety bond
These bonds are subject to underwriting consideration, so the cost of your bond depends not only on your required bond amount but also on a soft review of your personal credit report.
Why do I need this bond?
Tennessee collection service license bonds help to guarantee that principals (collection service licensees) faithfully and truly account to their clients within 30 days after the close of each calendar month unless otherwise provided by mutual agreement between the collector and the client. Generally, the bond ensures that principals conduct business in accordance with the provisions of Title 62, Chapter 20 of the Tennessee Code Annotated.
If the principal conducts unlawful or unethical business, the bond protects consumers from financial loss up to the full amount of the bond.
What’s the fine print?
Collection service license bonds in Tennessee remain valid for a period of 1 year from the effective date indicated on the bond form and a notary public must acknowledge all signatures on the bond form.
How to start a collection service in Tennessee
Applicants should contact the Licensing Board for information on the application, renewal and fees to become a collection service in Tennessee. This contact information is available in the Additional Resources section of this page.
The forms to be completed prior to starting a collection service include:
- Agency Application
- Agency Branch License Application
- Service License Bond in the proper amount based on the number of employees
- Agency License Renewal Application Form and Information
- Balance Sheet