Overview of Arkansas Collection Agency Bond Requirements
To get licensed at the Arkansas State Board of Collection Agencies you will need to obtain a collection agency bond in the amount of $10,000, $20,000 or $25,000.
This bond serves as a guarantee for your compliance with the Arkansas Code and the provisions for collection agencies in the states. These provisions include the requirement to not violate contracts with clients, and make available any accounts or bills you have collected on their behalf in accordance with such contracts.
If you violate this condition, thereby causing losses to your clients, the latter may resort to filing a claim against your bond to be compensated. In this case, the surety which has issued and backs your bond will conduct an investigation of the situation and determine the amount of compensation to extend to claimants. Such compensation can be as high as the full amount of the bond, also known as its penal sum.
Need to know more about bonds before you apply? See our useful ‘What is a surety bond’ guide for an overview of what bonds are and how they work!
To find out how much your Arkansas collection agency bond may cost, how bond claims arise, and how to get bonded - read on!
Would you rather speak to someone in person? Call us anytime at (866)-450-3412 to consult with one of our experts.
Cost of Your Collection Agency Bond
Surety bond cost is a fraction of the full bond amount. The bond amount is the total amount of compensation a surety may extend to claimants under a bond claims process. Arkansas collection agency bonds vary in their amounts ($10,000, $20,000 or $25,000), depending on the number of employees that work as collectors in your agency.
Based on those amounts, the surety will determine your bond cost by reviewing your credit score, your personal and business financial statements and possibly even records of your assets and liquidity.
Credit score remains the most important factor, though, and applicants who have a score of 700 FICO or above are typically offered the lowest rates on their bond. Such applicants may expect to get a rate between .75% and 1.5% of their bond amount.
Want to get an estimate of the cost? Try our bond calculator or see the table below for a range based on credit score. For a free and exact quote, see the section on getting bonded!
|Arkansas Collection Agency Bond||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|More than 13 employees||$25,000||$187.5-$375||$250-$625||$625-$1,250||$1,250-$1,875|
Bad Credit Bond Program
Wondering whether you can get bonded with bad credit? Not a problem with us!
Thanks to our Bad Credit Program we have access to various markets that make bonds available for applicants with lower credit scores. Rates under this program are higher than for applicants with higher scores. Yet, by improving your credit score, you can get increasingly better rates when you apply to renew your bond down the line!
Want to learn more about getting a bond with bad credit? See the program page for more information!
Claims Against Your Bond
Licensed collection agencies in Arkansas need to comply with the Arkansas Code, and in particular the Collection Agency Law. According to the law, under the bond agreement, agencies must transfer funds to creditors on whose behalf they perform collections in accordance with the agreement they have with such creditors.
If a collection agency violates their agreement with a client and causes financial losses to the latter, a claim can be filed against the bond. Fraudulent and dishonest actions that also lead to losses can also give rise to a bond claim.
When a claim is made against the bond, the surety investigates the claim to establish the amount of compensation it may need to extend to claimants. In the case of a legitimate claim, the surety extends compensation to cover for losses, up to the full amount of the bond.
When a surety extends compensation to a claimant, the bonded agency must repay the surety in full. Since bond amounts for this bond are between $10,000 and $25,000, having to cover one or several bond claims can lead to significant expenses for collectors as well as reputational damage. For this reason, it is always best to avoid giving rise to claims and comply with all conditions of the bond agreement!
Get Bonded with Bryant Surety!
Ready to get your Arkansas collection agency bond? Go ahead and submit our bond form! We will contact you shortly to provide you with a free and exact quote on your bond, along with further details on completing the application process.
It will take up to two working days for your bond to be issued. After that, we will mail it to you in paper and via email.
Learn more about getting bonded in Arkansas by speaking to our experts at (866)-450-3412! We look forward to hearing from you!