Overview of NYC and City of Buffalo Collection Agency Bond Requirements
When applying for a collection agency license in the cities of New York and Buffalo, you will need to obtain a collection agency bond in the amount of $5,000.
Both cities require this type of bond as a guarantee that collection agencies will comply with the local rules and provisions and those of the state of New York when conducting business. In particular, NYC collection agencies must comply with Subchapter S of Chapter 2 of Title 6 of the Rules of the City of New York. In the city of Buffalo, agencies must comply with Chapter 140 of the Code of the City of Buffalo.
If a collection agency in either of these cities violates these laws and thereby causes damages or losses to their clients or any other person, such person can file a claim against their bond. When a claim is filed, the surety that backs the bond will investigate the issue to determine whether to extend compensation to claimants and in what amount. The amount of such compensation extended by the surety can be as high as the full amount of the bond.
Looking for more information about surety bonds? See our ‘What is a surety bond’ guide for a clear and detailed overview of what bonds are, how they work, and why businesses need to get bonded!
If you’d rather speak to someone about getting this type of bond, call us at 866.450.3412 anytime!
Collection Agency Bond Cost
To get bonded you must pay a surety bond premium. This premium, or bond cost, is determined by the surety which issues the bond on the basis of the personal credit score of the applicant. The surety will often also take into consideration other personal financial information of the applicant to more accurately determine the rate at which they can get bonded.
Surety bond cost is a percentage of the total bond amount. The higher your credit score is, the lower that percentage will be. Applicants with scores above 700 FICO are typically offered by sureties the lowest possible rates on their bonds. Such an applicant can get an NYC or City of Buffalo collection agency bond for as little as $100.
To get an estimate of the cost of your bond, try our bond calculator or see the table below. For an accurate and free quote on your bond, complete our bond application form and we will contact you shortly!
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|Surety bond amount
|NYC and City of Buffalo Collection Agency Bond
Bad Credit Bond Program
Even though credit score is the most important factor that determines bond cost, that doesn’t mean that applicants with low credit can't get bonded!
With our Bad Credit Program you can get bonded just as quickly and easily as all other applicants.
Rates for applicants under this program are higher. This is because sureties perceive a greater risk in issuing bonds to low credit applicants. Yet, bond rates are calculated anew every time you apply for your bond. So, by improving your credit score from one bond application to the next, you can experience significant improvements in your bond rate too!
See the program page for more information about getting bonded with a lower score or get in touch with us!
Claims Against Your Bond
In both the city of New York and the city of Buffalo collection agencies must obtain surety bonds as a form of protection to their clients and any other person that may suffer losses due to an agency's violations of laws.
The bonds are required, in particular, as protection against losses or damages that arise due to “misstatement, misrepresentation, fraud or deceit or any unlawful act or omission” on behalf of agencies. Both bonds further require that collection agencies in each city comply with the local city laws that govern collection agencies, as well as the laws of the state of New York.
If an agency violates any of these laws and causes their clients or another person losses, a claim may be filed against their bond with the surety that backs the bond. If a legitimate claim is filed, the surety must then extend compensation to claimants, up to the full amount of the bond.
But a bond claims process does not end there. Under the bond agreement, a collection agency that has committed a violation and caused a claim to arise, must repay the surety in full for any compensation it extends. For this reason, it’s always best to avoid giving rise to claims!
Apply Here to Get Bonded!
Complete our bond application form to request a free quote. Along with the quote, we will provide you with all additional details about completing the bond application process.
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 by email.
To learn more about getting a collection agency bond in NYC or the city of Buffalo, call us at 866.450.3412!