Consumers – Make Sure Your Collection Agency is Bonded

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The brutal national economy has created a busy season for one American industry: collection agencies.

Collection companies have been hopping during the last 18 months, trying to recover funds and erase bad debts from scores of consumers. Another industry has followed close behind: scammers.

Fraudulent collection agencies are cropping up across the country. So are instances of collection agencies violating state regulations or mismanaging funds in a ways that ultimately hurt companies and consumers.

Those are reasons why it’s key for consumers and companies alike to make sure a collection agency is properly bonded with their state of business. Collection agency bonds help ensure that collection companies follow the law and properly manage recovered money.

Surety bonds are three-way agreements between the state, a collection company and a surety. These agreements ensure that the company follows the rules and doesn’t harm consumers — if they do, the bond provides a way for consumers and companies to receive compensation.

It takes more than filling out an application to get a surety bond. Underwriters look at a collection agency’s financial history, management structure and credit profile. These are typically $5,000 bonds.

The degree of scrutiny that goes into surety bonds is a solid form of protection for consumers. So are the bonds themselves — companies that have a claim filed against their bonds don’t stay in business very long.

Scammer and frauds don’t care much for surety bonds. And that’s why consumers should. Investigate a collections agency as much as possible and try to determine their bonding status.

Check with your state Attorney General or Department of Consumer Protection or a similar agency. Ask the collections company outright about its bonding and licensing situation.

Take every precaution necessary to ensure you won’t wind up getting hurt.

Interview on Green Building with Chris Cheatham

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The nation’s capital passed a landmark Green Building law in 2006. But Washington’s Green Building Act has proved problematic for the surety industry because of its language involving surety bonds.

The team at SuretyBonds.com recently explored the issue with Washington, D.C. attorney Chris Cheatham, a green building expert who’s followed developments at his excellent blog, Green Building Law Update.

You can listen to the audio Q-and-A here.

Bonds for Private Schools

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Surety bonds have become an important topic in education circles after a spate of recent private school closings.

Education information hub Edu In Review has a look at the issue with a post from Chris Birk of SuretyBonds.com.

You can check out the piece here.

Primer on Probate Bonds

Published by admin | Filed under Bonds

Check out an informative article on Probate Bonds by Chris Birk of Surety Bonds.com on the North Carolina Estate Planning Blog. The blog is run by attorney Gregory Herman-Giddens, who specializes in wealth planning, protection and management.

Best resource regarding Insurance Broker Bond

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Awhile back, I wrote about Insurance broker bonds and why the bond is required by the state for the insurance broker to be licensed.
I was recently doing some digging around for other information on insurance broker bonds and have found what I believe to be the best one stop source that is solely focused on the insurance broker bond. InsuranceBrokerBond.com provides great information with sections on “What they are?”, “How they work”, “Filing bond claims”, “How to obtain them”, and “What they cost”.
So if your in need of an insurance broker bond or just want to learn a little more about them, I highly recommend and stand behind the information Insurancebrokerbond.com provides.

What is a Bid Bond?

Published by admin | Filed under Bid Bonds, Bonds, Contract Bonds

A bid bond is used to keep the contractor/construction company from giving a low bid, and then after securing the contract and starting the job, either increase the price or object to completing the project because they may lose money.

The bid bond eliminates this from happening by requiring a couple things. Many times a developer will require that construction companies give a bid bond or else the bid will automatically be rejected. The first reason for this is because it allows the developer to be more at ease about the company they are potentially hiring. If they are able to obtain a bid bond, the surety company obviously stands behind their work and will follow up with a performance bond if the contract is awarded to him/her. Secondly, it allows the developer to know that if the company that is rewarded the contract goes bankrupt or cannot complete the project, the developer will not have to pay the difference from the lower bid to the higher bid.

You can find more info on bid bonds by visiting the NASBP website or Surety Bonds.com’s Bid Bond guide.

Maintenance Bonds

Published by admin | Filed under Bonds, Maintenance Bonds

With the shaky condition of today’s economy, you’ve probably noticed that your business has been a little slow lately. Contractors are, in fact, feeling the burn as people struggle to make ends meet and perhaps postpone renovations or new construction. Customers you do retain are most likely looking to make the most of every penny they invest in their project. The good news is that by educating your clients on the advantages of the maintenance bond that will accompany their contract, you can make them see that they are making a good, financially sound decision while improving their home and the market value of their property.

Maintenance bonds are simply another type of surety bond. Surety bonds, of course, are guarantees between three parties (in this case, a contractor, client, and surety bond company) to ensure that a contract is enforced and that both parties agree on the terms and conditions of the contract. Contractors are required to take out several forms of surety bonds during the course of any project and a maintenance bond is just one more bond in a long series.

Maintenance bonds are generally required after the completion of a construction project to guarantee the completed work was done correctly and without defect. Maintenance bonds are enforceable in the event of design defects, workmanship faults, and other such issues that stem from problems during the construction process. If there is a problem with any portion of the job and a claim is filed on the bond, the bond company who issued it will either provide appropriate financial compensation or make sure that the work is remedied by a licensed professional.

As a contractor, you’ll be responsible for purchasing the bond, which is usually bought through a company specializing in the sale of surety bonds. Your credit score and financial position will be considered to ensure that you can cover the bond should there ever be a claim filed against it. Occasionally, a contractor will find that his or her credit score is not sufficient to purchase the bond through conventional means. If that happens, there are other options, including bond companies who specialize in subpar credit bonds. Be aware that the bond prices at specialty companies will be significantly higher due to the risk involved.

Maintenance bonds expire after a set period when construction has been completed. Keep in mind that each bond is exclusive to the job, so each new contract will require a new bond.

Today’s featured bond is the insurance broker bond

Published by admin | Filed under Bonds, Insurance Broker Bonds

Many state and local governments require insurance brokers to get bonded to ensure they operate their practices according to law. This bond guarantees the broker will account for insurance premiums not only to their companies, but to the public as well. The insurance broker bond protects both consumers and the general public against unethical behavior on the part of the broker, including:
• Convincing customers to buy inappropriate insurance products
• Increasing profits by using inflated or false quotes
• Encouraging customers to misrepresent themselves on insurance applications
• Encouraging customers to misrepresent their financial situation on insurance applications

Many bonding companies across America currently write insurance broker bonds. These bonds are usually considered to have a medium risk. However, even those with poor credit can secure one if they work with an agency that accepts high-risk clients.

Be sure to check back periodically to learn more about other bonds.

Surety Bonds.com Launches new resources

Published by admin | Filed under Surety News

Hey Guys and Girls,

Sorry it has been a while since I last posted but I promise there won’t be another long stretch like that again. I know the suspense was killing you wondering when I would post next.

Surety Bonds Blog.com is all about being an educational source all about Surety Bonds and boy to I have some great news for those still confused about Surety Bonds.

Surety Bonds.com has just released their surety bonds educational center on their website and I really think you should check it out. There is some great information about surety bonds and they even provide a timeline and history about surety bonds. Did you know you can trace surety bonds all the way back in the year 2750 BC, amazing!

Surety Bonds.com has also released their Surety Bond Guide. You really should check this out. It gives you a run down on all the types of bonds and lingo involved with understanding the Surety Bond world.

You really should check out both of these great resources and if you would like you can even quote them, link to them, or just mention them on your own site to help out your users.

Contract Bonds (or Construction Bonds)

Published by admin | Filed under Bonds, Contract Bonds

There are many types of Surety Bonds and today I thought I would cover Contract Bonds. Contract Bonds, sometimes called construction bonds, are bonds that ensure that the contractor will fulfill the contract and if he does not then the bond company must pay the owner.

There are seven different kinds of Contract Bonds which includes: bid bonds, maintenance bonds, payment bonds, performance bonds, site improvement bonds, subdivision bonds, and supply bonds.

The maintenance bond is a guarantee that the completed work will be without defects, generally over a certain period of time. A maintenance bond would be great to have for individuals building a new home or even those that are remodeling their old home.

Be sure to check back here for more updates on the Surety Bond world and information about Surety Bonds in general.