Fairfax County Precious Metal Dealer Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $10,000
- Who Needs it: All precious metal dealers operating in Fairfax County, Virginia
- Purpose: To protect the public from financial harm if the precious metal dealer violates the terms of their permit
- Who Regulates Precious Metal Dealers in Fairfax County: The Fairfax County Regulation and Licensing Branch
Background
Virginia Code 54.1-4108 requires all precious metal dealers operating in the state to obtain a permit from the local licensing authority in their city or county. The Virginia legislature enacted the permitting requirement to ensure that precious metal dealers engage in ethical business practices. To provide financial security for the enforcement of the permitting law, precious metal dealers must purchase and maintain a $10,000 surety bond to be eligible for a permit.
What is the Purpose of the Fairfax County Precious Metal Dealer Bond?
Fairfax County requires precious metal dealers to purchase a surety bond as part of the application process to obtain a permit. The bond protects the public from financial harm if the dealer fails to comply with the regulations set forth in Fairfax County Code of Ordinances 33-1-10. Specifically, the bond protects the public if the dealer engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the precious metal dealer violates the terms of their permit.
How Can an Insurance Agent Obtain a Fairfax County Precious Metal Dealer Surety Bond?
BondExchange makes obtaining a Fairfax County Precious Metal Dealer bond easy. Simply log in to your account and use our keyword search to find the “Precious Metal Dealer” bond in our database. Don’t have a login? Gain Access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
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Is a Credit Check Required for the Fairfax County Precious Metal Dealer Bond?
No, a credit check is not required for the Fairfax County Precious Metal Dealer bond. Because the bond is considered relatively low risk, the same low rate is offered to all precious metal dealers operating in the county, regardless of their credit history.
How Much Does the Fairfax County Precious Metal Dealer Bond Cost?
The Fairfax County Precious Metal Dealer bond costs just $100 per year or $10 per month.
Who is Required to Purchase the Fairfax County Precious Metal Dealer Bond?
Fairfax County requires all precious metal dealers to purchase a surety bond as a prerequisite to obtaining a permit. To paraphrase Fairfax County Code of Ordinances 19-121, a precious metal dealer is a person who purchases and sells secondhand items containing precious metals such as gold, silver, jewelry, and other items containing precious metals or gems from the general public.
Exemptions to this definition include:
- Purchases of precious metals directly from manufacturers
- Qualified fiduciaries distributing an estate’s assets
- Banks, trust companies, or bank holding companies
- Antique or gem exhibitions sponsored by nonprofit organizations
- Repairing, restoring, or designing jewelry
- Purchases of nonprecious scrap metals
- Purchases or sales of coins
Virginia Code 54.1-4106 allows dealers to obtain an irrevocable letter of credit in lieu of a surety bond. Surety bonds are generally considered the better option for businesses as they free up working capital. For more information on whether your customer should purchase a bond or deposit cash, check out our Surety Bonds vs. Letters of Credit article here.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Precious Metal Dealers Apply for a Permit in Fairfax County?
Precious metal dealers in Fairfax County must navigate several steps to obtain a permit and must obtain a separate permit for each location they operate. Below are the general guidelines, but applicants should refer to the Regulation and Licensing Branch’s website for details on the process.
Permit Term – All Fairfax County Precious Metal Dealer Permits expire one year from the date of issuance and must be renewed before the expiration date.
Step 1 – Obtain a Business, Professional, and Occupational License
Precious metal dealers must first obtain a Business, Professional, and Occupational License from the Department of Tax Administration before applying for a precious metal dealer permit. Click here for additional information on the Fairfax County Business, Professional, and Occupational License.
Step 2 – Purchase a Surety Bond
Precious metal dealers must purchase and maintain a $10,000 surety bond.
Step 3 – Complete an Application
Precious metal dealers should submit their completed application in person at the Regulation and Licensing Branch at the following address:
12000 Government Center Parkway, Suite 127
Fairfax, VA 22035
Dealers must complete the application in its entirety, get it notarized, and ensure they submit the following items:
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- $215 application fee by check or cash
- Surety bond or letter of credit
- State-issued picture identification
- Completed state background check
- Copy of Fairfax Business, Professional, and Occupational License
- Copy of non-residential use permit for business location
- Copy of “Placed in Service” report for trade scale provided by the scale company
Applications are accepted in person at the branch office Monday-Friday between 8:00 am-3:30 pm, and dealers must allow two to three weeks for their applications to be processed and approved. Contact the Regulation and Licensing Branch for additional assistance in the application process.
How Do Fairfax County Precious Metal Dealers Renew Their Permit?
Precious metal dealers must apply for a new permit before their existing one expires, as there is no specific renewal process. Dealers must pay a $215 renewal fee and ensure they renew their surety bond to avoid termination of their permit. All Fairfax County Precious Metal Dealer Permits expire one year from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for Precious Metal Dealers in Fairfax County?
Fairfax County does not require precious metal dealers to purchase any additional insurance. Dealers must purchase and maintain a $10,000 surety bond.
How Do Fairfax County Precious Metal Dealers File Their Bonds?
Precious metal dealers should deliver their completed bond forms, including the power of attorney, in person to the Regulation and Licensing Branch at the following address:
12000 Government Center Parkway, Suite 127
Fairfax, VA 22035
The bond requires signatures from both the surety company that issues the bond and the applicant. The surety company should include the following information on the bond form:
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Name of the obligee and the permit type applied for
- Bond amount
- Date the bond goes into effect
- Date the bond is signed
What Can Fairfax County Precious Metal Dealers do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, precious metal dealers in Fairfax County must ensure that they:
- Do not engage in any acts of fraud
- Faithfully honor all consumer contracts
- Do not purchase or sell any stolen goods
- Maintain all required transaction records
What Other Insurance Products Can Agents Offer Precious Metal Dealers in Fairfax County?
Fairfax County does not require precious metal dealers to purchase liability insurance. However, most reputable businesses will purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Fairfax County Precious Metal Dealer Customers?
Fairfax County unfortunately does not provide a public database of active precious metal dealers in the county. However, we suggest contacting the Regulation and Licensing Branch to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
