Overview of Massachusetts Collection Agency Bond Requirements
To obtain a collection agency license from the Massachusetts DOB, you will need to submit a $25,000 collection agency bond during the application process.
The bond is required to guarantee your compliance with the laws of the state that apply to collection agencies. As a whole, the bond serves as a guarantee that you will account for and pay all collections you make on behalf of your clients to them in a specified amount of time. The bond also guarantees you will comply with any other terms of the agreements you have with your clients.
If you should violate any of the above, anyone who has suffered a loss as a result of such a violation may bring action against your bond in the form of a claim. Under a claim, the surety that backs the bond will
Violating either of the above conditions may result in a claim being filed against your bond by your clients. In this case, the surety that issues and backs your bond will investigate the matter and extend compensation to cover for such losses. Such compensation can be as high as the full amount of the bond.
If you’ve never obtained a bond before, see our ‘What is a surety bond’ guide for more information about surety bonds and how they work!
For more information about getting bonded and how much your bond may cost, see below! To speak to one of our bond professionals, call us at 866.450.3412!
Surety Bond Cost
The cost of getting bonded is equal to a fraction of the total amount of the bond. It is determined by the surety on the basis of your personal credit score. The surety also takes into account other personal financial factors of the applicant, when necessary, to properly determine the rate at which they can get bonded.
Generally, the higher your credit score is, the lower your rate will be. For example, for applicants with a credit score of 700 FICO or above, the bond rate will be about .75% to 1.5% of the total bond amount.
You can get an estimate of your bond rate through bond calculator or from the table below. You can also request an exact quote on your bond free of charge and without any added obligations by completing our bond form.
Surety Bond Cost Calculator
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|Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Massachusetts Collection Agency Bond||$25,000||$187.5-$375||$250-$625||$625-$1,250||$1,250-$1,875|
Bad Credit Bond Program
Want to get bonded but have a low credit score? We have plenty of options to offer you!
By applying through our Bad Credit Program you can get bonded as quickly and easily as all other applicants. Your bond rate under this program will be higher, due to the greater risk that sureties perceive in extending bonds to applicants with lower credit. Yet, low bond rates are only temporary if you work on improving your credit score. The more you increase your score over time, the better your rate will become!
Under Chapter 93, Sections 25 of the Massachusetts General Laws, the bond required of collectors in the state is conditioned to be for the benefit of collectors’ clients. It specifies that collectors need to comply with the conditions of the agreements they have made with their clients, along with any further conditions specified by the state treasurer. The bond further guarantees that collectors will pay and turn over to their clients any collections they have made on their behalf.
When a collector does not comply with one of the above conditions or provisions and causes losses to their clients, the latter can take action by making a claim against the collector’s bond. When a claim is made, the surety that vouches for the bonded party must take measures to investigate the issue and determine whether it needs to extend compensation to claimants.
If the surety establishes that there is legitimate cause for a claim, it will move to compensate claimants in the appropriate amount which can be as high as the full amount of the bond. But the bond claims process does not stop here. Once a surety has compensated claimants, the collector who violated the bond agreement must reimburse the surety in full for such compensation.
To avoid having to deal with costly and complex situations such as bond claims, it is advised that you always comply with the conditions of your bond. In this way, you will save yourself the trouble associated with a claim, and the only expenses you will have associated with the bond is your initial bond cost!
Apply for Your Bond Today!
Get started with your bond application by completing our bond form. We’ll then contact you with your bond quote and details about finalizing your application process.
Once the surety receives your final application documents, it may take up to two working days for your bond to be issued. We will then forward it to you by mail as well as provide you with a digital copy by email.
You can always call us at 866.450.3412 if you have any questions about this or other bonds, or if you need any assistance with your application. We will be happy to help!