Overview of Connecticut Collection Agency Bond Requirements
To open and operate a collection agency in Connecticut, you will need to apply for a license and obtain a collection agency surety bond. The bond must be in an amount of $25,000.
You need to obtain this bond as a guarantee that you will comply with the provisions of Part 12 of Chapter 669 of the Connecticut Statutes. These provisions include the requirement to strictly comply with the terms of the agreement you have with your clients on behalf of which you are making collections. The bond also serves as financial security for your clients in case you violate these agreements and cause any losses to them as a result.
If you do violate an agreement, a client can file a claim against your bond to request compensation for losses. Your surety will then investigate the matter and extend the necessary compensation to claimants. Such compensation can be as high as the full amount of the bond, also known as its penal sum.
Never applied for a bond before? Our detailed ‘What is a surety bond’ guide will help you understand everything you need to know about bonds!
Read on to find out more about the cost of the Connecticut collection agency bond, how much it costs, and how to apply! Alternatively, feel free to call us at 866.450.3412 anytime, if you’d rather speak to one of our experts personally.
Cost of Your Bond
The cost of getting your surety bond is a small part of its total amount. The total amount of the Connecticut collection agency bond is $25,000. You will be required to pay a fraction of that amount, also known as a bond rate.
Your surety will determine the bond rate primarily based on your personal credit score. You may also be asked to provide the surety with personal or business financial statements and other financial information though for bonds with relatively low amounts, such as this one, your credit score will typically suffice.
The higher an applicant’s credit score is, the cheaper it is for them to get bonded. Applicants who have a score of 700 FICO or more are offered bonds within the lowest possible range - between .75% and 1.5% of the total bond amount.
Try our bond calculator below to get an estimate of your cost or see the cost table for a rate based on credit score range.
Surety Bond Cost Calculator
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|Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Connecticut Collection Agency Bond||$25,000||$187.5-$375||$250-$625||$625-$1,250||$1,250-$1,875|
Bad Credit Bond Program
While a good credit score will get you bonded at a lower rate, you can also get a bond with a low score!
We’ve created our Bad Credit Program to make bonds accessible to those applicants who may otherwise get turned down by other sureties due to their low credit score. Thanks to our great surety partners, we have access to markets that allow us to provide bonds to such applicants. Rates under this program are higher but by improving your credit score, you can get increasingly better rates on your bond!
Visit the program page to find out more about the program, and request a quote!
Claims Against Your Bond
Part 12 of Chapter 669 of the Connecticut Statutes specifies the specific conditions which a collection agency in the state must comply with under their bond agreement.
The main such condition is that licensed debt collectors must “well, truly and faithfully account for all funds entrusted to the licensee and collected and received by the licensee in the licensee's capacity as a consumer collection agency.”
If a collection agency is found to have violated the conditions of the contract they have with their clients, defrauded them or not made available any funds they have collected, this could constitute a cause for a bond claim.
When a bond claim is made, the surety backing the bond will investigate the issue. Upon finding that there is sufficient cause for a claim, it will act to compensate claimants for their losses, up to the full amount of the collector’s bond. Once the surety has compensated claimants, the bonded collector must reimburse the surety in full, as part of the bond agreement.
Apply for Your Bond Today!
Ready to get bonded or maybe you simply want to request a quote? Submit our bond form, and we will shortly provide you with a free quote on your bond along with further details on completing your application.
It will take about two working days for your bond to be issued. We will then send it to you by standard mail and email.
For more information about the bonding requirements in Connecticut, call our bond experts at 866.450.3412!