West Virginia Collection Agency Bond

According to West Virginia collection agency law, known as the Collection Agency Act of 1973, “all persons, firms, corporations and аssociations directly or indirectly engaged in the business of soliciting from or collecting for others any account, bill or indebtedness originally due or asserted to be owed or due another and all persons, firms, corporations and associations directly or indirectly engaged in asserting, enfоrcing or prosecuting those claims” must have a bond.

This is not the full description, so make sure you read the full text of the law to see if your activity classifies as debt collection. If it does, then you need to post a collection agency bond. A separate bond is required for each additional office that you operate.

Internal Auditing Division requires a $5,000 surety bond. $5,000 is the total bond amount, meaning that the bond can provide compensation up to that amount.

The cost that that bond principal pays is an annual premium, usually in the range 1%-3% of the bond amount, but no less than $100. For applicants who receive quotes in that range, this translates into yearly payments of between $100 and $150. However, since these bonds have 2-year terms, you’ll need to make one payment every two years. Applicants with lower credit scores are subject to higher premiums. Have a look at the table below for a more detailed breakdown of premiums.

As you can see, your personal credit score is directly correlated with your premium. However, factors such as financial strength and experience in the field can also contribute to lower rates. Find out more on our What Does a Surety Bond Cost? Page.

Yes, you can still get bonded even if you have bad credit. As you can see from the table above, your premium will be higher. This is the case because surety bonds companies must offset the risks associated with bad credit bonds.

In our experience, 99% of applicants get bonded without having to post collateral or look for co-signers. The only applicants that may be refused a bond are people with open bankruptcies or late child support payments.

To apply, all you have to do is submit an application through our online form and we’ll take care of the rest. Your bond should be issued within two business days.

If you have specific questions regarding the application procedure, feel free to ask them at (877)-514-5146. One of our agents will gladly assist you.

It’s mandatory that you renew your bond every two years if you want to keep your license active. Luckily, the procedure is simply and requires that you simply pay your renewal quote. The Internal Auditing Division does not require that renewal notices are given.

Cancellation can be done by giving a 60-day notice. After that time has passed, your bond will no longer be in force, but you will still remain liable for violations done during a past period.

The Collection Agency Act of 1973 outlines the provisions which you must adhere to in order to avoid claims against your bond. You’re obliged to collect and transfer funds on behalf of third parties in accordance with it, and not use any methods that are considered fraudulent. If you are found to be in violation, you may have to deal with a bond claim.

Bond claims are an unpleasant scenario that can be very costly. If you’re notified of a valid claim, make sure you pay it promptly before it goes to court. If it does, your surety bonds company will cover the expenses, but will then require that you reimburse it for all costs, even legal expenses.

Financial loss is not the only reason why you want to avoid surety bond claims. Since the collection agency bond goes hand-in-hand with your license, you might lose your license without one. Often, bond underwriters might be unwilling to sign bonds for applicants with a history of past claims.