Overview of Maryland Collection Agency Bond Requirements
When applying for a business license for a debt collection agency in Maryland, you will require a collection agency bond in the amount of $5,000.
This bond guarantees that you will comply with the Maryland Consumer Debt Collection Act and all other laws and rules that apply to the activity of debt collection, such as the Maryland Code Annotated, Business Regulations, Title 7. This includes performing business in accordance with applicable debt collection standards and rules. It also includes pay any collections made on behalf of clients to them in due time.
If a collector violates any of the requirements of the bond agreement, either the state or any member of the public who has suffered losses or damages can bring a claim against their bond. In such a case, the surety will investigate the claim and may extend compensation to claimants as high as the full amount of the bond, also known as its penal sum.
Is this your first time getting bonded? See our helpful ‘What is a surety bond’ guide to learn about how bonds work, and why businesses need them!
Would you rather speak to someone personally? Call us at 866.450.3412 to get in touch with one of our bond experts!
Surety Bond Cost
The cost of getting bonded is based on the amount of the bond you need to obtain. Your surety will determine this cost based on your personal credit score. It may also take into account your financial statements or information about your industry experience. The higher your credit score is, the lower the rate will be at which you can get bonded.
Applicants with a credit score of 700 FICO or more are typically offered the lowest rates on their bonds. For this bond, such applicants can expect to get bonded for as little as $100. You can get an estimate of your bond cost by using our bond calculator or from the table below.
Surety Bond Cost Calculator
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|Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Maryland Collection Agency Bond||$5,000||$100||$100-$125||$125-$250||$250-$500|
Bad Credit Bond Program
Worried about how you’ll get bonded with a low credit score? With us, you can get bonded easily!
If you have a low credit score you can apply to get bonded through our Bad Credit Program. This program is designed to make bonds easy and accessible to such applicants and offer them a way forward for their business. Rates for applicants with lower scores are higher but by improving your score consistently, you can easily qualify for a better rate down the road.
Check out the program page to learn more about this option or to request a quote!
According to the Maryland Business Regulation Code Ann. §7-304, the surety bond required by collection agencies is intended to guarantee that the agency will comply with the “Maryland Consumer Debt Collection Act and any other laws applicable to consumer debt collection.”
The regulation further states that the bond is for the benefit of both the state of Maryland as well as any person who suffers a loss or damages as a result of a collector’s violation of any of these laws.
If a collector does commit such a violation, then a claim can be brought against their bond by one of the above parties to secure compensation. The surety that backs the bond is obliged to investigate bond claims and determine whether there is cause for a claim or not.
If the surety establishes that the claim is legitimate, it will extend compensation to claimants to cover for losses up to the full amount of the bond. If a claim amount exceeds the amount of the bond, the surety can not be held liable for anything above the maximum bond amount!
When the surety covers a claim, the bonded collection agency must reimburse it in full. This is a standard condition of every bond agreement. To avoid giving rise to a claim, the best course of action for collectors is to always strictly comply with the conditions of their bond!
To request a free exact quote on your Maryland collection agency bond, complete our bond application form! We will shortly contact you with your quote, along with further details about the bonding process.
It will take up to two working days for the surety to issue your bond, once your application is finalized. We will then forward your bond to your via mail and email!
Want to know more about surety bonds and the bonding process? Call us at 866.450.3412 anytime!