Overview of Minnesota Collection Agency Bond Requirements
Applicants for a collection agency license in the state of Minnesota need to post a collection agency bond to the Department of Commerce. The initial and minimum amount of the bond is $50,000, and the maximum $100,000. For bond renewals, the exact amount of the bond depends on the amount of collections during the previous year by already licensed agencies.
The purpose of this bond is to guarantee that licensed and bonded collection agencies comply with the requirements and provisions of the Minnesota Statutes. These include making collections available to clients within a set period of time, as is required by the Statutes, as well as conducting business honestly and faithfully. If a collection agency violates these requirements, anyone who suffers from losses or damages as a result can file a claim against the agency’s bond
When a claim is filed against a bond, the surety that backs the bond will extend compensation to claimants up to the full penal sum of the bond.
If this is your first time getting bonded and you need more information about bonds, our detailed ‘What is a surety bond’ guide is a good place to start!
For more information about the cost of your bond, bond claims, and how to get bonded, see the following sections!
If you’d rather speak to someone about getting a collection agency bond in Minnesota, give us a call instead at 866.450.3412!
MN Collection Agency Bond Cost
The cost of your bond is a small percentage of its full amount. The minimum bond amount for this bond is $50,000. Whether you need to obtain a bond in a higher amount will be determined by the Department when you apply.
When you apply for your bond, the surety will determine the rate at which you can get bonded by reviewing your credit score. The higher your score is, the lower your bond rate will be. It may also require to view your business and personal financial statements and further financial information, depending on how high your bond amount is.
Usually, applicants with a FICO score of 700 are offered the lowest rates on their bond. Such applicants can expect to get a rate between .75% and 1.5% on their collection agency bond bond.
Try our bond calculator below to get a quick estimate of your bond cost or see the table for an approximate range of your bond rate based on credit score.
For an exact quote on your bond - see the section about getting bonded!
Surety Bond Cost Calculator
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|Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Minnesota Collection Agency Bond||$50,000||$375-$750||$500-$1,250||$1,250-$2,500||$2,500-$3,750|
Bad Credit Bond Program
Through our Bad Credit Program you can get bonded even when your bond score isn’t perfect.
We have access to markets that make it possible for us to bond applicants with low scores, even though at a slightly higher rate than our other applicants. But since bond cost is determined on a case-by-case basis, you can significantly improve your own cost over time by raising your credit score.
See the program page to find out more, to request a quote, and to get in touch with us!
Claims Against Your Bond
Bonds guarantee that the bonded individuals or businesses will comply with the conditions of the bond. The Minnesota collection agency bond requires licensed agencies in the state to comply with Section 332.31 to 332.45 of the Minnesota Statutes. These include making available collections they have made on behalf of their clients within 45 days after the end of the month during which these collections were made. They also include conducting business faithfully and honestly when dealing with debtors.
If a collectors violates the conditions of the bond, a claim can be brought against them by anyone who has been damaged as a result of such a violation. In such a case, the surety backing the bond will investigate the issue and extend compensation to claimants. Such compensation can be as high as the full amount of the bond.
In return for the surety covering a claim, the bonded collector must repay any compensation in full. This is how surety bond agreements work which is why it is always better for a bonded business to avoid violating the conditions of their bond agreement.
Apply for Your MN Collection Agency Bond Here!
To get started with the bonding process, complete our bond form. We will then provide you with an exact quote on your Minnesota collection agency bond along with full information about completing the bond application.
Once your final application is in, it will take about two working days for your bond to be issued by the surety. We will then send it to you via standard mail and email.
Call us at 866.450.3412 anytime to speak to our bond professionals and find out more about the bonding requirements in Minnesota!