Telemarketing Bond
A telemarketing bond, also known as a phone solicitor license bond, guarantees the principals performance. If a company is found to be negligent per the states statutes, a claim may be filed. Some state governments, before processing a company´s license, require this bond.
In recent years the telemarketing industry has changed dramatically with new rules, do not call lists, and large fines. For these reasons bonding companies have been very reluctant to write this form of business. Their main concerns being; all of the new laws can create confusion about what is allowed and what is not, stiff fines can easily put phone solicitors out of business, and that the new "do not call list" will make it difficult for telemarketers to operate. All of the above can make their business financials less stable, thus increasing the risk. In the future we hope that the market will stabilize as bonding companies began to understand this new telemarketing market.
Do to these issues; the standard market for telemarketing bonds can be three to five times the rate of other less-risky commercial bonds. However, high-risk telemarketing bond applicants can expect to see the same rates as other commercial bond applicants placed in a high-risk, bad credit bond market.
The bad credit commercial bond program, of which the telemarketing license bond qualifies for, is a way for those with poor credit to be approved. The surety industry operates with the assumption of no loss. For this reason those with no credit, or bad credit, are often declined. This specialty program allows these people to be bonded by charging a higher premium then the standard market.
