Telephone Solicitation Bond ($100,000) Bond - Statewide in Arizona
Table of Contents
Brief Summary
Arizona sets one figure for telephone sellers, $100,000, with no tiers and no reduction for small callers. The bond is what lets a full registration go through with the Secretary of State, and it costs an annual premium instead of $100,000 in cash left with the state treasurer.
Under ARS 44-1274 every telephone seller registered in Arizona must maintain a $100,000 bond issued by a surety authorized to do business in the state, filed with the state treasurer and in favor of the state for the benefit of consumers harmed by a violation. A copy of the bond goes in with the seller's registration at the Arizona Secretary of State, and the registration expires every June 30.
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How to Apply for a Telephone Solicitation Bond ($100,000) Bond:
- Confirm you are a seller under ARS 44-1271 and not exempt or limited under ARS 44-1273.
- Have the seller's legal name exactly as it will appear on the Secretary of State registration.
- Provide owner information and business details for the credit and underwriting review.
- Review the quote, pay the premium and receive the executed $100,000 bond on the Secretary of State form.
- Have the bond countersigned and notarized.
- File the bond with the state treasurer and submit a copy with your registration, script and fee to the Secretary of State.
Detailed Information About the Arizona Telephone Solicitation Bond ($100,000) Bond:
Who has to register and post the bond
ARS 44-1272 requires a seller to register with the Arizona Secretary of State before soliciting any consumer in Arizona. A seller is a person who, directly or through a solicitor, initiates telephone calls to provide or arrange to provide merchandise to consumers in exchange for payment, among the other activities listed in ARS 44-1271. A telephone solicitation is any voice communication from a live operator, announcing device or otherwise that offers merchandise for sale or rent to or from a person located in Arizona. The full registration must include a copy of the bond filed with the state treasurer.
Check the exemptions first
ARS 44-1273 exempts several groups. They include a person acting within the scope of a license issued under Title 20, charitable organizations, political parties and candidates, retail businesses that solicit under the same name as their store where at least half of the business involves buyers obtaining merchandise at the store and the business holds a transaction privilege tax license, certain business to business sellers, and catalog sellers that meet the statute's conditions. Other groups, such as licensed securities dealers, public companies, newspapers of general circulation and financial institutions, file a limited registration. The Secretary of State accepts limited and exempt registrations without a filing fee. Under ARS 44-1273 the burden of proving an exemption is on the person claiming it.
What the bond covers
The bond is held in trust by the state treasurer for any consumer who suffers financial damage from a violation of the telephone solicitation article or an unlawful practice under ARS 44-1522. The surety's liability to a consumer is limited to the money the consumer paid to the seller or solicitor plus reasonable attorney fees. The bond can be sued on in successive actions until the full $100,000 is used up, and a consumer has four years from the act or omission to bring suit. Neither the seller nor the surety may hold a control or beneficial interest in the other.
Filing the form
The Secretary of State publishes a Telephone Solicitation Bond form naming the State of Arizona for the benefit of any consumer who suffers financial damage. The Secretary of State asks that the bond be countersigned and notarized and that your script be included with a full registration. Processing takes about five days.
Fees and renewal
A full year registration is $500, due in July, and the fee is on a sliding scale by the month you register. The registration expires on June 30 each year and is renewed by filing a new registration statement within thirty days before expiration with the annual fee.
Cancellation and cash deposits
A surety may cancel on sixty days' written notice by certified mail to the state treasurer, the attorney general and the seller. By the cancellation date the seller must file a replacement bond or make a cash deposit. A $100,000 cash deposit with the state treasurer is allowed instead of a bond, but it can only be withdrawn four years after the seller stops doing business in Arizona, or four years after a surety bond replaces it.
How the premium is set
The surety reviews owner credit, business financials, time in business, the products sold and the calling operation, and complaint history. The exact annual premium is on your quote before you buy.
Eligibility and Requirements for an Arizona Telephone Solicitation Bond ($100,000) Bond:
- Bond of exactly $100,000, with no tiers.
- Surety company authorized to do business in Arizona, with no control or beneficial interest between surety and seller.
- State of Arizona as obligee for the benefit of consumers who suffer financial damage.
- Countersigned and notarized bond on the Secretary of State Telephone Solicitation Bond form.
- Annual registration renewed before June 30 with the fee.
Arizona Telephone Solicitation Bond ($100,000) Bond FAQs:
No. ARS 44-1274 sets a single $100,000 amount for every seller that must post it. The only alternative is a $100,000 cash deposit with the state treasurer.
Businesses fully exempt under ARS 44-1273, subsection A, such as Title 20 licensees acting within their license, charities and qualifying retail stores, file an exempt registration. Limited registrants under subsection B file a limited registration. Neither pays a Secretary of State filing fee. Everyone else registers in full with the $100,000 bond.
Four years from the act or omission. The surety is liable only for money the consumer paid to the seller or solicitor plus reasonable attorney fees, and total payouts cannot exceed $100,000.
Every June 30. Renew by filing a new registration statement within thirty days before expiration and paying the annual fee, which is $500 for a full year.
The surety prices it from owner credit, business financials, time in business, the products sold and complaint history. You see the exact annual premium on your quote before you commit.
