Overview of New Jersey Collection Agency Bond Requirements
Every company that wants to offer debt collection services must be licensed in order to legally operate in New Jersey. An important step in the licensing process is the collection agency bond.
A type of surety bond, collection agency bonds are required in almost every state as a way to protect citizens of these states against embezzlement of funds and other violations that can cost them financially.
Collection agencies in New Jersey are required to be in compliance with Title 45, Chapter 18 of the New Jersey Revised Statutes. Failing to adhere to the provisions set out in the chapter can lead to a bond claim, which will serve to compensate claimants for the loss they incurred.
If you want to learn more about the cost of getting bonded or the application process you can keep reading, or simply call us at 866.450.3412.
New Jersey Collection Agency Bond Cost
Although the total amount of this bond is set at $5,000, this is not how much it will cost you. $5,000 is the bond’s penal sum, i.e. the maximum protection it extends.
Surety bonds, similarly to insurance, are paid in premiums which are usually due once a year. The New Jersey collection agency bond can usually be underwritten for $100 for most applicants although applicants with an especially low credit score can see their premium rise up to $500.
Apply For Your Bond Today!
We offer a fast and secure online application, which is just one page long. Once you submit it, you will have done most of the work. One of our agents will get in touch with you and help you complete the whole process seamlessly. After paying your quote, we’ll do our best to process your application in just one or two business days.
Submitting Your Collection Agency Bond
To submit your bond, you’ll need the original bond form signed by the surety, as well as the surety’s financial statements and a Power of Attorney demonstrating that the Attorney-in-Fact can legally represent the surety.
When filing you will also need the signatures of two witnesses (they cannot be from the surety company) for each signature and pay a processing fee of $25 payable to Treasurer, State of New Jersey.
Both the Collection Agency Bond Application and the fees should be mailed to:
NJ Division of Revenue
Collection Agency Bond Section
PO Box 453
Trenton, NJ 08646
Staying Out of Claims
Violating the terms of your bond agreement by not adhering to the provisions in Title 45, Chapter 18 of the New Jersey Revised Statutes can trigger a claim. Claims can go as high as the bond’s penal sum ($5,000).
Typical violations of the bond agreement that can lead to a claim include:
- Charging fraudulent (hidden) fees
- Operating without a valid license or bond
- Using unlawful methods of collecting debt
- Withholding the transfer of funds to their rightful owners
If one of your clients or the state suffers loss as a result of your actions, they can file a claim. Once notified of a claim, you are obliged by law to make good on it. If you don’t, it’s the surety’s responsibility to provide the compensation. However, indemnity agreements are standard in the surety industry, which means the final financial responsibility still lies with you.
Remember that collection agency bonds must be renewed each year ahead of time because processing times may vary. The Division of Revenue and Enterprise services currently does not offer an expedited service for these bonds.
When you work with Bryant Surety Bonds, we’ll send you renewal reminders well ahead of time, so you never have to worry about missing a deadline.