Overview of California Credit Services Organization Bond Requirements
The credit services organization bond is required in California in order for an organization to be registered at the Department of Justice. The bond itself must be posted to the Secretary of State.
The purpose of the bond is to provide protection to buyer of credit services and guarantee that they will be provided all the necessary information to make an informed choice when opting for such services.
If the organization violates the California Civil Code and causes losses and damages to their customers in doing so, a claim can be filed against their bond to provide compensation. The latter may be as high as the full bond amount which is $100,000 in this case.
If you need more information about how surety bonds work and why they are required, see our detailed ‘What is a surety bond’ guide!
In the sections below you can read more about the cost of this bond, how and why bond claims arise, and how you can get bonded.
If you want to know more about the bonding requirements in California or for any other bond-related questions, call us at 866.450.3412!
Cost of Your Bond
The amount of this bond is $100,000. The cost of your bond will be a percentage of that amount.
How much exactly you will need to pay depends on the a number of factors among which your personal credit score is the most important. Typically, the higher your credit score, the lower your bond rate. Since this bond has a high bonding amount and claims against it can be made within two years of the credit services organization ceasing to conduct business, sureties will also review applicants’ financial information in greater detail. This will likely include your financial statements, your personal assets and liquidity, as well as your work record and experience.
Credit score remains the most important of these factors, and for applicants with a score of 700 FICO or above, a rate between .75% and 1.5% is customary. At a rate of 1%, you bond’s cost will be $1,000.
Find out how much exactly you will need to pay for your bond by submitting a surety bond application form. We will provide you with a free and precise quote!
Bad Credit Bond Program
If you need to get bonded but have a low credit score, we can help you! Thanks to our Bad Credit Program you can get bonded just as easily as all other applicants.
Due to the higher perceived risk in bonding applicants with lower scores, sureties typically provide higher rates to such applicants. This applies even more to credit services organizations due to the sensitive nature of their services.
Yet, bond rates are determined on a case by case basis so make sure to submit a bond application form to receive a free and exact quote on your bond.
This bond guarantees that credit services organizations will comply with:
Title 1.6E (commencing with Section 1789.10), Part 4 of Division 3 of the Civil Code
Chapter 2 (commencing with Section 995.010), Title 14, Part 2 of the Code of Civil Procedure
If an organization is found to be in breach of the above regulations and does not pay for any damages or losses that result out of such a breach, then a claim against this bond can be filed. The violations that constitute a breach include deceptive business practices, false advertising, fraud, misrepresentation, and more.
When a claim is filed, the surety will extend compensation to claimants up to the full amount of the bond to cover for actual damages. The credit services organization will then have to repay the surety in full.
Moreover, the Civil Code also includes the possibility for punitive damages which are not covered under the bond and will have to be covered additionally by the organization. Since bond claims can be very costly, it is advised that organizations steer clear from any practices that may lead to a claim.
Get Your Bond Today!
Ready to apply? Go ahead and submit our bond application form! We will then contact you with a free quote on your bond along with additional information about completing the application process.
Your bond will be issued within two days of being approved, after which we will forward it to you via mail and email.
Need to know more? Call us at 866.450.3412 to receive support and further information about these bonds!