Overview of Arizona Collection Agency Bond Requirements

Anyone who wants to solicit claims for collection or collects claims in the state of Arizona must get licensed and obtain a collection agency bond. The bond must be submitted along with the license application to the Department of Financial Institutions. The amount of this bond depends on the gross annual income of the licensee and can vary between $10,000 and $35,000.

The bond’s function is to guarantee that licensed agencies will comply with the provisions of the ARS, and in particular with the conditions of the bond agreement. The ARS specifies that the bond is put in place to guarantee that funds handled by the agency on behalf of its clients shall be paid to clients in due time.

If a licensed and bonded agency misuses the funds of their clients or otherwise violates the provisions of the ARS, clients can bring action against the agency and their bond, and request compensation. When a legitimate claim is filed against a bond, compensation is extended by the surety to claimants. This compensation can be as high as the penal sum of the bond, also known as the bond amount.

If you are new to surety bonds, and are not sure why you need a bond, see our ‘What is a surety bond’ guide for more information about what bonds are and how they work.

Start your surety bond application today! Why us?
  • Quick turnaround - just 1-2 business days
  • Tailor-made advice on building a strong application
  • Exclusive bad credit programs

In the sections below you can learn about how much it costs to get this bond, what can give rise to a bond claim, and how you can get a bond.

If you have any additional bond-related questions, call us at (866)-450-3412 anytime!

Cost of Your Bond

According to Chapter 9 of the ARS, collection agencies in the state must obtain a bond when getting licensed. The cost of your bond is a fraction of the full amount of the bond you will be required to obtain.

While the bond amount varies depending on the gross annual income of the collection agency, for first-time license applicants the amount is the minimum possible amount of $10,000 (or lower, in some cases). For agencies renewing their license, the bond amount can be anywhere between $10,000 and $35,000.

The cost you will need to pay for your bond is determined by your surety primarily on the basis of your credit score. Certain other financial factors may also be taken into account but typically the higher your score is - the lower the cost of your bond will be. Applicants who have a very high score, one of 700 FICO or more, can easily obtain this bond for as little as 1% of the total amount or even less!

See the table below for some rough estimates of your bond cost, based on credit score.

Bond Cost Based on Credit Score
Arizona Collection Agency Bond Surety bond amount Above 700 Between 650-699 Between 600-649 Below 599
Gross annual income below $250,000 $10,000 $100-$150 $100-$250 $250-$500 $500-$1,000
Between $250,001 and $500,000 $15,000 $112.5-$225 $150-$375 $375-$750 $750-1,125
Between $500,001 to $750,000 $25,000 $187.5-$375 $250-$625 $625-$1,250 $1,250-$1,875
Above $750,000 $35,000 $262.5-$525 $350-$875 $875-$1,750 $1,750-$2,625

To find out how much exactly your bond will cost, fill in our bond application form and we will shortly contact you with a free and precise quote.

There are no obligations attached to requesting a quote!

Bad Credit Bond Program

Even if your credit score is currently not particularly high, you can still get bonded! Through our Bad Credit Program, applicants with lower scores can obtain the bonds they need without any difficulty.

Because sureties perceive a higher risk in bonding applicants with lower scores, rates under this program are higher than for applicants with higher credit. Yet, bond rates are not once and for all, and by improving your credit score, you can get increasingly better rates over time.

Visit the program page for more information about these bonds and to request a free quote!

Claims Against Your Bond

Claims are filed against bonds when the bonded party, in this case the collection agency, has violated the conditions of the bond agreement.

According to the Arizona Revised Statutes, the purpose of the bond required by collection agencies is to guarantee that “the applicant, within thirty days from the last day of the month in which a collection is made, shall make an account of and pay to the client the proceeds collected for him by the applicant, less charges for collection in accordance with the agreement between the applicant and client.”

In other words, the condition of the bond agreement is that the agency will act in accordance with the agreements it has with its clients, and will make available any funds it has collected for them in due time. If these conditions are violated by the agency, and verifiable losses are experienced by its clients, a claim can be filed against the bond.

When a claim is filed, the bond agreement serves as the basis for which compensation is extended to claimants. This compensation covers all losses or damages suffered by claimants but cannot be more than the amount of the bond. When a surety extends compensation to claimants, the bonded agency must then reimburse it in full for such payments.

Giving rise to a bond claim can be a complicated affair which is why it is best to avoid situations that could potentially lead to such an outcome!

Apply Today!

Get started by completing our bond application form. We will then offer you a free and precise quote on your bond and further details on completing the application process.

It takes about two working days for bonds to be issued, after which we will send you your bond via standard mail as well as via email.

Start your surety bond application today! Why us?
  • The lowest possible rates
  • A 100% money-back guarantee
  • Access to specialty programs, not available to small agencies

You can reach us at (866)-450-3412 anytime if you have any bond-related questions!


About the author:
Todd Bryant
Todd Bryant is a graduate of Germantown Academy and the University of Pittsburgh College of Business Administration Honors College. He has been President of Bryant Surety Bonds, Inc., an A+ rated Business with the Better Business Bureau, since 2007. Licensed as a producer with the Department of Insurance, he has been published in the National Association of Surety Bond Producers newsletter and on numerous authoritative publications such as The Washington Post, Entrepreneur.com, Azcentral.com and many more.