How to Get a Florida Collection Agency License

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Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Florida collection agency license bond needs. Learn how to get a Florida collection agency license, below.

What Collection Agency Licenses Are Issued in Florida?

The Florida Office of Financial Regulation (FLOFR), specifically the Division of Consumer Finance, licenses collection agencies to operate within the state. There are two types of collection agency licenses, one for consumer collection agencies and one for commercial collection agencies.

While consumer collection agencies are licensed to collect only consumer debt and a certain amount of third-party consumer debt, collecting commercial claims requires a commercial collection agency license.

What Are the Steps in the Licensing Process?

Prior to applying for licensure as either a consumer or commercial collection agency, you’ll need to register your business properly with the state. The applications and licensing requirements for a consumer collection agency differ in some respects from those for a commercial collection agency. The primary differences include the license fees (currently $200 for consumer and $500 for commercial) and the $50,000 license bond requirement, which pertains only to commercial collection agencies.

Why is a Florida Collection Agency License Bond Required?

Any licensee bond serves as the licensee’s pledge to operate lawfully and ethically. A Florida collection agency license bond specifically guarantees that the licensed agency will do business in accordance with Chapter 559 Part V of the Florida Statutes, which governs commercial collection agencies and their collection practices.

The surety bond agreement is a legally binding contract involving three parties:

  • FLOFR, the party requiring the bond, is the “obligee”
  • The commercial collection agency purchasing the bond is the “principal”
  • The bonding company underwriting and approving the bond is the “surety”

Any unlawful or unethical collection practices that cause a member of the public or the state of Florida to incur a financial loss can result in the injured party filing a claim against the collection agency’s license bond.

How Are Florida Collection Agency License Bond Claims Paid?

The terms of the surety bond agreement require the principal to pay all valid claims. If the principal doesn’t pay the claim within a certain amount of time, the surety will go ahead and make the payment. However, the principal is legally obligated to reimburse the surety in full.

How Much Does a Florida Collection Agency License Bond Cost?

Like most surety bonds, Florida collection agency license bonds are sold for a small percentage of the required bond amount. FLOFR mandates the $50,000 bond amount, but the premium rate is assigned by the surety based on certain underwriting criteria.

The surety’s main concern is the risk of not being repaid for claims paid on behalf of the principal. The best indicator of the extent of that risk is the principal’s personal credit score. With good credit, the premium rate for a Florida collection agency license bond should be in the range of one to three percent, making the annual premium $500 to $1,500.

If your credit score is good, your premium rate should be in the range of 1% to 2%, which would make the annual premium for your Florida contractor license bond somewhere between $100 and $200.

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