Why You Need Collection Agency Bond
Collection agency bonds are required from all collection agencies. An agency must buy the bond as a prerequisite to getting licensed. The bond promises that the agency will follow the rules and regulations of the state. But is a collection agency bond necessary? Yes, and here are the reasons:
Inspiring trust: Collection agencies are often viewed in a negative light. Because their job is basically to coerce debtors to pay, they often end up earning a bad reputation. The collection agency bond is an effort to assure the public that a licensed agency has promised to follow rules and regulations. This is meant to inspire trust towards the agency’s working.
Protection against misuse: A collection agency deals with a lot of sensitive information such as financial and personal information of a person. This also increases the possibility of misuse by the agency, including fraud or theft. The bond is a guarantee that the agency will not use the information for any such purposes.
Compensation: If the agency behaves in an unethical manner, such as theft or overcharging the customers, the collection agency bond offers a means of compensation for the injured party. Once a complaint is made against the bond, the surety will investigate the matter. If found guilty, the agency will have to pay up accordingly.