Friday, 1 November 2019

What to Know About a Collection Agency Bond

If you have been hired by another company to try to get money that they are owed, then you are going to want to make sure that you get a collection agency bond. This is because this is often considered to be a high risk industry and sensitive information regarding clients is involved means extra protection is required. These are often required to be purchased before any state will issue you the license for this type of work, so keep reading to know more.

What to Know
The collection agency bond is a promise that you and your employees are going to follow all regulations and rules that are part of the license. This also promises that you are going to be paying the insurance company back if they pay out any claims against your coverage. Here are some of the reasons that people might file a claim against you that would be covered, such as:

Overcharging your customers
Misusing the money of customers
Manipulation of the fees for your own benefit
Discrimination
Theft
Fraud

These claims would be able to be made against the coverage while it is active and you would need to take care of the claim after it has been filed. You should make sure that you are taking care of these claims before they become a larger problem and the surety company you purchase the cover steps in. However, if you don’t do this, then the surety holder will make sure that they are validating it and some steps they would take includes:

• If the claim is invalid, then no more action is going to happen, but you would be responsible for the costs that were incurred during the entire investigation process.

• If it is valid, then the surety company is going to remind you of the responsibilities that you have and request that the claim be settled, which would mean financially compensating for any damages or losses suffered by the claimant.

This is just a few of the steps that would need to be taken if you ever have any claims that are made against the collection agency bond that you purchase. You should make sure that you are checking with the state that you are going to be operating in regarding what levels of coverage is required. There are different amounts for each state, so make sure that you have it since you are going to be paying only 1% to 15% of the entire coverage amount. 

Make sure that you are thinking about how much coverage is going to be required based on the state that you would be operating in. You can find this out by asking before you apply for a license since this is deemed to be a risky industry due to the nature of the information that is shared. This coverage is important, so find the right company to help you get it and ensure that you are following up on all claims regardless of whether or not you believe that they are valid or invalid before the surety company does it for you.

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