Overview of Colorado Collection Agency Bond Requirements

To operate as a debt collector or open a debt collection agency in Colorado, you need to submit a collection agency bond along with your application. These bonds have an amount between $12,000 and $20,000.

The purpose of the Colorado collection agency bond is to guarantee that licensed collectors will comply with the state collection agency law, and perform their obligations in a faithful and honest manner. In particular, the bond requires collectors to transfer any collections they have made on behalf of their clients in due time or when requested to do so in writing. The bond further requires collectors to comply with the contractual terms they have with each client.

If a collector violates such an agreement and causes losses to their clients, the latter can file a claim to request compensation. Such compensation is initially extended by the surety, and can be as high as the full penal sum of the bond.

New to bonds? See our detailed ‘What is a surety bond’ guide for more information about how bonds work and why you need a bond!

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See below for more information about the cost of this bond, how bond claims occur, and how you can apply to get bonded.

To find out more about the bonding requirements for Colorado collection agencies, call us at (866)-450-3412!

Cost of Your Bond

The cost of your bond is a percentage of the total amount of your bond. Colorado collection agencies must obtain a bond in a minimum amount of $12,000 and a maximum amount of $20,000. The exact bond amount is determined by the licensing authority on the basis of the annual collections made by the collectors.

Based on your bond amount, the surety will determine your bond rate. The most important factor that determines the cost of your bond is your personal credit score. The higher your credit score is, the cheaper it will be for you to get bonded. Sureties may sometimes also review applicants’ financial statements and other financial records to properly determine the rate they should offer to applicants.

Applicants with a FICO score of 700 or more are offered the lowest rates on their bonds. For this bond, this would mean a rate between .75% and 1.5% of the total bond amount.

To get an estimate of your bond cost try our bond calculator below. To get a free and exact quote on your bond, see the section about getting bonded!

Bad Credit Bond Program

You don’t need to have a perfect credit score to get bonded! With us, applicants who have low or nonexistent credit can get bonded just as easily as everybody else.

By applying through our Bad Credit Program, you can get bonded even if your credit score currently is low. To get bonded under this program you will need to pay a higher rate, though, due to the risk that sureties perceive in issuing bonds for applicants with lower scores. But since bond rates are determined on a case-by-case basis, you can work your way up to increasingly better rates by improving your credit score over time.

Make sure to visit the program page to find out more about it, and to request a quote!

Claims Against Your Bond

The Colorado collection agency bond guarantees that licensed collectors in the state will comply with the Colorado Fair Debt Collection Practices Act (CFDCPA), and in particular 5-16-124 of the Act.

In particular, the bond guarantees that collectors will comply with the agreements they have with their clients and account for and pay any collections they make for them. Under the bond agreement, collectors are also required to return, upon written demand, any “notes, valuable papers, or evidence of indebtedness” given to them by their clients for the purposes of collection.

If a collector violates these conditions and causes losses to a client, a claim can be made against the bond. When a bond claim is made, the surety that backs the bond financially must investigate the issue and determine whether and how much compensation to extend to claimants. Such compensation may be as high as the full amount of the bond. Once a surety settles a claim it must receive full compensation by the bonded collector. This condition is part of every bond agreement.

Apply for Your Bond Today!

Want to apply for a bond or request a quote? Complete our bond form, and we will shortly get back to you with a free and precise quote on your bond. Once you finalize your application, it will take up to two working days for you bond to be issued. We will then mail it to you, as well as provide you with a digital copy.

Not ready to apply? Then simply get a free no-obligations quote, so you can see our low prices!

Need more information? Call our surety professionals at (866)-450-3412 to learn more about getting a collection agency bond in Colorado!


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.