Collection Agency Bonds
Collection agencies collect money from defaulters. But, how can you make sure the agency is acting ethically? A collection agency bond covers the risk a creditor takes when a third-party collection company gets involved. This bond protects the client against any unethical activity. A surety company can offer this bond to a collection agency.
How Does a Surety Company Determine a Collection Agency’s Credibility?
Before issuing a bond, surety companies will do a thorough background check on a collection agency to make sure they are credible and eligible to secure a bond with them. Surety companies must first protect themselves by issuing bonds to collection agencies that have proven themselves to be reliable.
What is the Process if Someone Wants to File a Claim on the Collection Agency?
The complainant would first contact the surety company that has issued the collection agency bond. They would explain the situation, which may include, but not be limited to, theft, fraud, overcharging, or discrimination. The surety company expects the collection agency to deal with the claim and if they do not, an investigation will begin to determine the validity of the claim. The collection agency will have to bear all the legal costs, besides the total cost claimed if the claim is found to be valid.