Utah Collection Agency Bond Explained
All collection agencies in the State of Utah are obliged by law to obtain a collection agency bond. The bond is a requirement of the Utah Department of Commerce and it ensures that the funds collected by the agency are handled accordingly.
Utah collection agency bond is a form of guarantee, in this case protecting the clients of the agency against any fraud you might engage in. In case of failure to comply with the laws and regulations coming with the bond, a claim can be filed against you.
The collection agency bond, like other bonds, is an agreement involving three entities. The principal is your collection agency. The obligee is the Utah Department of Commerce. The surety is the company underwriting the bond.
Questions about Collection Agency Bonds
Who needs a Utah collection agency bond?
Individuals or businesses wishing to operate as collection agency in Utah need to register with the state. Part of the registration process is posting a bond with the Utah Department of Commerce.
The Utah collection agency bond is designed to ensure that agencies comply with all provisions of Title 12, Utah Code Annotated 1953.
How much does the surety bond cost?
The Utah Department of Commerce requires that all collection agencies post a bond in the amount of $10,000. The bond remains valid for 1 year from the effective date. All agencies are required to renew their bonds regularly, in order for their businesses to continue to operate lawfully.
Despite the set bond amount, however, agencies will be paying different bond premiums. The bond cost is a fraction of the total bond amount and its final cost depends on your personal and business finances. Credit score is the most important factor among all. The higher your credit score, the lowest the risk for the surety, and the better bonding rate you get.
Take a look at the table below, which illustrates how your personal score affects your final bonding costs:
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Utah collection agency bond||$10,000||$100-$150||$100-$250||$250-$500||$500-$1,000|
If you want to learn more about the cost formation of the surety bonds, feel free to visit our Surety Bond Cost page.
Can I get bonded if I have bad credit?
As applicants with bad or no credit score present a higher risk for the surety company, they usually get an increased bonding rate in the range of 5%-10%.
This shouldn’t worry applicants with problematic finances, however, as Lance Surety Bonds created a special Bad Credit Surety Bonds program.
As we work with a number of A-rated, T-listed surety companies, even clients with low credit score, tax liens, bankruptcies, or civil judgement get a chance for a great bonding deal.
How do I get bonded?
Are you ready to get your Utah collection agency bond? You can start by applying online here. Just complete the application form and attach all the necessary paperwork and we’ll get back to you with a free bond quote.
If you have further questions on how bonding works, check out our How to Get Bonded page.
Lance Surety Bonds’ experts are here to help. If you have anything you wish to ask us, just call us at (877) 514-5146, and we’ll assist you.
How are bond claims handled for Utah collection agencies?
The Utah collection agency bond aims to protect the interests of your customers and the state of Utah. If you fail to abide by the rules and regulations you are bonded with, you can get a bond claim.
In case of a valid bond claim, the surety will compensate the affected party for a sum up to the full amount of the bond. However, it is up to you to reimburse the amount paid afterwards. That is why it is best to avoid claims as much as possible.