Oregon Collection Agency Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain Oregon Collection Agency Bonds

At a Glance:

• Lowest Cost: $100 per year or $10 per month based on the applicant’s credit
• Bond Amount: $10,000
• Who Needs it: All collection agencies operating in Oregon
• Purpose: To ensure the public will receive compensation for any damages should the collection agency violate registration law
• Who Regulates Collection Agencies In Oregon: The Oregon Division of Financial Regulation

Background

Oregon statute 697.015 requires all collection agencies operating in the state to register with the Division of Financial Regulation. The Oregon legislature enacted the registration laws and regulations to ensure that collection agencies engage in ethical business practices. In order to provide financial security for the enforcement of the registration law, collection agencies must purchase and maintain a $10,000 surety bond to be eligible for registration.

What is the Purpose of the Oregon Collection Agency Bond?

Oregon requires collection agencies to purchase a surety bond as part of the application process to obtain a business registration. The bond ensures that the public will receive compensation for financial harm if the collection agency fails to comply with the regulations set forth in Oregon statute 697.031. Specifically, the bond protects the public in the event the collection agency engages in any acts of fraud or fails to pay funds collected to creditors. In short, the bond is a type of insurance that protects the public if the collection agency breaks registration laws.

How Can an Insurance Agent Obtain an Oregon Collection Agency Surety Bond?

BondExchange makes obtaining an Oregon Collection Agency Bond easy. Simply login to your account and use our keyword search to find the “collection” 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 (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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Is a Credit Check Required for the Oregon Collection Agency Bond?

Surety companies will run a credit check on the owners of the collection agency to determine eligibility and pricing for the Oregon Collection Agency bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Oregon Collection Agency Bond Cost?

The Oregon Collection Agency Bond can cost anywhere between $100 to $500 per year or $10 to $50 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $10,000 bond requirement.

$10,000 Collection Agency Bond Cost

How Does Oregon Define “Collection Agency?”

Oregon statute 697.005 defines a collection agency as any business entity who engages in any of the following activities:

• Solicits or collects a claim that is owed to another party
• Sells forms used in the collection of debts
• Uses a fictitious name to collect its own debts
• Solicits or repossesses collateral security owed to another
• Engages in any activity that gives the impression that a third party has been employed to collect a claim

Exemptions to this definition include:

• Employees of a collection agency
• Individuals who prepare periodic statements of accounts for a third party
• Licensed attorneys
• Certified public accountants
• Banks and other financial institutions
• Licensed real estate brokers
• Escrow agents and individuals who provide collection or billing services related to closing an escrow account
• Trustees of a trust deed
• Credit persons
• Public officers acting under court order
• Property managers
• Anyone providing billing or factoring services
• Lenders who collect their own debts
• Mortgage bankers
• Public utility companies
• Public bodies
• Individuals who receive an assignment of debt without an obligation to pay the assignor
• Entities determined to be involved in the protection of public health, safety, or welfare

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 Collection Agencies Apply for Registration in Oregon

Collection agencies in Oregon must navigate several steps to secure their registration. Below are the general guidelines, but applicants should refer to the NMLS’s application guidelines for details on the process.

Registration Period – The Oregon collection agency registration expires on December 31 of every year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Collection agencies must purchase and maintain a surety bond with the following limit:

• • $10,000 for collection agencies with a location and/or trust account in Oregon
  • $15,000 for collection agencies without a location or trust account in Oregon

Step 2 – Request a NMLS Account

The Oregon Collection Agency Registration application is submitted electronically through the Nationwide Multistate Licensing System (NMLS). To submit a registration application, applicants must first request to obtain an NMLS account.

Step 3 – Complete the Application

All Oregon Collection Agency Registration applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:

• • Company financial statements
  • Primary company and consumer complaint contacts
  • Information regarding the company’s operating and trust accounts
  • Disclosure questions
  • Company business plan containing the following information:
    • Marketing strategies
    • Products
    • Target markets
    • Fee schedule
    • Operating structure
  • Certificate of Good Standing
  • Company staffing and internal policies
  • Company formation documents
  • Management and organizational charts
  • Trust account authorization

Collection agencies must pay the following fees when submitting their registration application:

• • $350 application fee
  • $36.25 background check fee (per person)
  • $15 credit report fee (per person)

How Do Oregon Collection Agencies Renew Their Registration?

Collection agencies can renew their registration online through the NMLS. Registration holders need to simply login to their account to access their renewal application. The Oregon collection agency registration expires on December 31 of every year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Oregon Collection Agency Registration?

Oregon does not require collection agencies to purchase any form of liability insurance as a prerequisite to obtaining a business registration. Collection agencies must purchase and maintain a surety bond with the following limit:

• $10,000 for collection agencies with a location and/or trust account in Oregon
• $15,000 for collection agencies without a location or trust account in Oregon

How Do Oregon Collection Agencies File Their Bond?

Collection agencies should submit the completed bond form, including the power of attorney, electronically through the NMLS. The surety bond requires signatures from both the surety company that issues the bond and a representative from the collection agency. The surety company should include the following information on the bond form:

• Name of entity/individual(s) buying the bond
• Surety company’s name and state of incorporation
• Date the bond goes into effect
• Date the bond is signed

What Can Oregon Collection Agencies Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, collection agencies in Oregon must ensure that they follow all registration regulations in the state, including some of the most important issues below that tend to cause claims:

• Do not engage in any acts of fraud
• Pay all money owed to creditors

What Other Insurance Products Can Agents Offer Collection Agencies in Oregon?

Oregon does not require collection agencies to purchase any form of liability insurance as a prerequisite to obtaining a business registration. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue other types of 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 Oregon Collection Agency Customers?

The NMLS conveniently provides a public database to search for active collection agencies in Oregon. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.