AI-assisted research summary: Collection agencies must keep a bond on file with the director and meet bond conditions tied to payment, compliance, and business continuity.
(a) Each collection agency shall file and maintain with the director a bond in the penal sum of $25,000 for the first office in this State and $15,000 for each additional office in this State. (b) All bonds required by this section shall be issued by a surety company authorized to do business in the State, and shall run to the State. The bond shall be conditioned that the collection agency faithfully, promptly, and truly shall account and pay within thirty days after the calendar month, to its clients the net proceeds due on all collections made during the calendar month. The bond shall be conditioned further that the collection agency will comply with all requirements of this chapter or any other statute now in force or hereafter enacted with respect to the duties, conduct, obligations, and liabilities of collection agencies. (c) In addition to any other remedy, the director or any person claiming to have sustained damage by reason of any breach of the conditions of the bond may bring action on the bond for the recovery of any damages sustained therefrom. The liability of the surety shall not exceed the amount of the bond issued to the collection agency for which the bond was issued. (d) The bond shall be continuous in form and remain in full force and effect unless terminated or canceled by the surety. Termination or cancellation shall not be effective, unless notice thereof is delivered by the surety to the director and the collection agency at least sixty days prior to the date of termination or cancellation. (e) Failure, refusal, or neglect of a collection agency to maintain in full force and effect a bond as required by this section shall cause the automatic suspension of the registration of the collection agency effective as of the date of expiration, termination, or cancellation of the bond. The director shall not reinstate the affected registration until satisfactory proof of bond coverage is submitted to the director as required by this section. Failure to effect a reinstatement of a suspended registration within sixty days of the expiration of the requirements of registration shall cause it to be forfeited, thereby forfeiting all registration and biennial renewal fees. A collection agency, within fifteen days after receipt of the notification of the registration forfeiture, may request an administrative hearing to review the forfeiture pursuant to chapter 91. (f) Upon expiration, termination, or cancellation of the bond, the collection agency shall cease to do business as a collection agency in this State and the collection agency shall not resume business in this State until a bond as required in subsection (a) is submitted to the director. [L 1987, c 191, pt of §1; am L 1990, c 246, §§6, 7]