What Is a Wisconsin Collection Agency Bond?
If you are considering to start a collection agency business in Wisconsin, you have to undergo a rigorous administrative process. You have to obtain a Wisconsin collection agency license, which entails providing a collection agency bond.
The goal of posting a surety bond is to ensure that you will abide by applicable state laws and regulations. It provides an extra level of protection for your customers against potential illegal actions on your side.
Your collection agency bond functions as a contractual agreement between three entities. Your collection agency is the principal that needs the bonding. The Wisconsin Department of Financial Institutions is the obligee that requires it. The surety is the third party providing the bond.
Questions about Collection Agency Bonds in Wisconsin
When is this bond necessary?
If you want to operate as a collection agency in Wisconsin, you need to get licensed with the Department of Financial Institutions. This requires that you provide a surety bond. If you maintain your records in Wisconsin, the required bond amount is $25,000. The amount is $35,000 in case you maintain them outside the state. The bond form is available on the Department’s website. The bonding ensures your compliance with the state Collection Agency Act.
What is the Wisconsin collection agency bond cost?
The bond amount that you have to post as a Wisconsin collection agency is either $25,000 or $35,000. The actual surety bond cost that you have to pay is only a few percents of required amount. It is referred to as the bond premium. For applicants with stable finances, the expected bond rates are between 1% and 5%.
How exactly is your bond cost formulated? The surety that you apply with needs to consider your personal credit score, business financials, and any liquidity and assets that you can showcase. The goal is to determine the level of bonding risk involved. The smaller it is, the cheaper your bond cost is likely to be.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Wisconsin collection agency bond - Records maintained in the state||$25,000||$187.5-$375||$250-$625||$625-$1,250||$1,250-$2,500|
|Records maintained out of the state||$35,000||$262.5-$525||$350-$875||$875-$1,750||$1,750-$3,500|
Can I get bonded with problematic finances?
With Lance Surety Bonds, you can obtain the bond you need even if your finances are not perfect. We’ve designed our Bad Credit Surety Bonds program for applicants struggling with low credit scores, tax liens, bankruptcies, and civil judgements.
As the bonding risk is higher, the bad credit rates are between 5%-10% to compensate for it. Since we foster close relationships with a number of A-rated, T-listed surety companies, we are still able to offer you a great bonding option.
How do I get bonded?
Keen on learning more about the bonding process? Here is our extensive resource on the topic on our How to Get Bonded page.
Lance Surety Bonds’ experts are here to help. You can call us at (877) 514-5146 for any questions you may have or if you need assistance with your bond application.
What happens in case of a bond claim?
If you transgress from your obligations under the Wisconsin Collection Agency Act, you may end up with a claim against your surety bond. This is the protection mechanism that harmed parties can use in order to seek a fair reimbursement.
The maximum penal sum of your bond is the amount that claimants can demand. If the case is proven, the surety that bonded you has to cover the costs initially to ensure a fast compensation. You are liable to repay it fully, as this is your responsibility under the bond indemnity language.