Idaho Collection Agency Bonds Explained
In case you want to start a collection agency in Idaho, you are required to undergo a licensing procedure with state authorities. It involves obtaining a collection agency bond.
The bond works as a safety net for the state and your customers. It provides a guarantee that you will follow the law in your operations as a debt collector.
As the surety bond constitutes a contract between three entities, the principal is your business. The obligee is the Idaho Department of Finance, which sets the requirements. The surety is the third party, which backs you by getting you bonded.
Questions about Collection Agency Bonds in Idaho
When do I need this bond?
You have to provide a surety bond in order to qualify for an Idaho collection agency license. Meeting this criterion ensures your compliance with all applicable laws, including Title 26, Chapter 22 of the Idaho Statutes, known as the Idaho Collection Agency Act.
You need to submit your application and documents via the Nationwide Multistate Licensing System & Registry (NMLS). The licensing authority that sets the requirements and regulates your trade, however, is the Idaho Department of Finances.
What are the bonding costs?
The initial bond amount required from Idaho collection agencies is $15,000. Whenever you apply for a renewal, this amount is calculated in a different way. You have to provide a statement of your net collections for the preceding year. Based on them, your bond amount should be either $15,000, or twice your average monthly net collections, whichever is greater. The maximum amount can be up to $100,000.
In order to get bonded, you have to pay a fraction of the required amount, which is called the bond premium. It is formulated after careful consideration of your personal and business finances.
Your actual surety bond cost depends on factors such as your personal credit score, business finances, and any fixed and liquid assets you may showcase. Your surety assesses the level of risk involved by examining these indicators. You are likely to pay less for your bond if your finances are in good shape.
|Idaho Collection Agency Bond Cost Based on Credit Score|
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Collection agency bond - initial amount||$15,000||$113-$225||$150-$375||$375-$750||$750-$1,500|
|Maximum amount based on monthly net collections||$100,000||$750-$1,500||$1,000-$2,500||$2,500-$5,000||$5,000-$10,000|
Can I get bonded if I have bad credit?
It is more difficult to get a collection agency bond if your finances are not stellar. That’s why Lance Surety Bonds runs its Bad Credit Surety Bonds program. It is designed for applicants with low credit scores, tax liens, bankruptcies, and civil judgments.
The rates in this program are between 5% to 10%. This is necessary because the risk for the surety is higher. Nevertheless, since we collaborate with a long list of A-rated, T-listed surety companies, you can receive a top bonding option from us.
How do I apply?
The bonding process is straightforward. You can start by filling out our online application form (it takes 5min), submitting your completed paperwork together with it. Then we can issue an exact quote for you. You can directly buy the bond online afterwards.
In case you’re interested in learning more about how bonding works, don’t miss our extensive How to Get Bonded page.
Our bonding experts are here to help. You can reach us at (877) 514-5146.
How are bond claims handled?
Surety bonds don’t protect your collection agency. Instead, they safeguard the interests of your clients. That’s why you may receive a claim if you fail to follow the law in your operations.
The case is investigated and if proven, you have to pay fair compensation to the claimant. The maximum penalty is the bond amount you have posted at the time of licensing or renewal, which is between $15,000 and $100,000 in this case.
The costs on proven claims remain your responsibility. While the surety may pay them initially, you have to reimburse it. Thus, it is a good idea to avoid claims, since they can hurt your business both in terms of finances and reputation.
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What Our Clients Have To Say?
Kimberlee AblesQuick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
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