What Is a Pennsylvania Telemarketing Entity Bond?
Telephonic sellers in Pennsylvania have to get licensed with the state Office of the Attorney General. You need to obtain financial security in the form of a telemarketing bond or certificate of deposit.
Telemarketing bonds aim to protect the general public from unlawful activities that telemarketers may engage in. They ensure your legal compliance. If a consumer faces damages as a result of your illegal actions as a telephone solicitor, they can get a compensation through a bond claim.
Your Pennsylvania surety bond is, similarly to the rest of bonds, a three-party contract. The principal is your telemarketing business. The Office of the Attorney General is the obligee requiring the bond. Thirdly, the surety is the party that provides the bond.
Frequently Asked Questions
Who needs to obtain this bond?
If you want to operate as a telephonic seller in Pennsylvania, you need to get bonded. The required bond amount is $50,000. It needs to accompany your telemarketing registration application. You can see a sample bond form here. The bond must be obtained at least a month before you start your operations. It has to be active at all times during your registration period.
The bond requirement is set in the Pennsylvania Telemarketer Registration Act. The security instrument ensures that you will follow the rules set in the Act, as well as any other applicable laws such as the state’s Unfair Trade Practices and Consumer Protection Law.
How much does this telemarketing bond cost?
You need to obtain a $50,000 surety bond as a Pennsylvania telemarketer. This is the bond amount required from the licensing authorities. It is different from your bond premium that is your actual cost. The typical rates for telemarketers are between 1% and 3%, in case your finances are in good shape.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Pennsylvania telemarketing bond||$50,000||$375-$750||$500-$1,250||$1,250-$2,500||$2,500-$5,000|
The exact surety bond cost is calculated on the basis of a number of factors. Your personal credit score and business finances, as well as assets and liquidity are of great importance. The surety provider needs to assess the level and bonding risk. That’s how it determines your bond premium. The more stable your finances are, the lower your cost will be.
What if I have problematic finances?
For telemarketers with low credit scores, tax liens, bankruptcies, or civil judgements, getting bonded can be a rough ride. Lance Surety Bonds operates its Bad Credit Surety Bonds program to allow applicants with problematic finances to get bonded.
The premiums are in the range of 5% to 10% in order to compensate for the higher bond risk. Still, we work with a number of A-rated, T-listed surety companies, so we are able to select a great bonding option for you.
How do I apply for bonding?
Would you like to learn more about how bonding functions? Here is our How to Get Bonded page that you can consult for a detailed overview.
Reach us at (877) 514-5146 if you have any questions about the process, or would like to get help with your application.
How are bond claims handled for telemarketing companies?
The purpose of telemarketing bonds is to protect consumers from any fraudulent or illegal activities by telephone solicitors. If you engage in such actions, you may end up with a bond claim. Harmed parties can seek a reimbursement up to the bond amount you have posted, which is $50,000.
At first, your surety may step in to cover the costs, so that claimants receive a fast compensation. However, you are fully liable to repay it afterwards. This means that bond claims are to be avoided as much as possible, as they can be a heavy financial burden for your business.