Surety Bond Encyclopedia

Collection Agency Bond - Statewide in Colorado

Brief Summary

The Colorado collection agency bond is not one size. It starts at $12,000 and rises in $2,000 steps with the money the agency remits or owes to its clients, stopping at $20,000. Working out your step before you apply means the bond on file matches what the Attorney General's office expects.

Colorado Revised Statutes 5-16-124 requires every licensed collection agency, and every applicant before a license issues, to maintain a bond of $12,000 plus $2,000 for each $10,000 or part of $10,000 by which its average monthly sums remitted or owed to all clients during the previous year exceed $15,000. The total is capped at $20,000. The bond runs to the Colorado Attorney General for the use of the people of Colorado and the administrator.

We can help with all Colorado bonds!

How to Apply for a Collection Agency Bond:

Work out average monthly sums remitted or owed to all clients during the previous year to find your bond step.
Obtain the bond on the Attorney General's collection agency surety bond form, or set up a qualifying savings account, deposit or certificate of deposit.
Complete the Attorney General's initial application checklist through the licensing portal.
Pay the $500 investigation fee and the $1,500 initial application fee.
Renew by July 1 each year and keep the bond in force at all times.

Detailed Information About the Colorado Collection Agency Bond:

Finding your bond amount

The statute sets a formula, not a flat figure. Start with $12,000. If the agency's average monthly sums remitted or owed to all of its clients during the previous year exceed $15,000, add $2,000 for each $10,000 of the excess or any part of it. The total never goes above $20,000. In practice that works out to:

$15,000 or less per month: $12,000 bond
Over $15,000 up to $25,000: $14,000 bond
Over $25,000 up to $35,000: $16,000 bond
Over $35,000 up to $45,000: $18,000 bond
Over $45,000: $20,000 bond

Who posts it and who does not

Section 5-16-119 requires collection agencies to be licensed, and the Attorney General's office applies the license to debt and judgment buyers as well. Section 5-16-124 says a debt buyer does not need a bond as long as it does not also provide third-party debt collection, and the bond section does not apply to a person collecting a debt the person owns. The Attorney General also lists attorneys, agencies collecting only commercial, business, investment and agricultural debts, and creditors collecting their own debts in their own name as outside the license requirement.

Deposit instead of a bond

An applicant or licensee may instead present evidence of a savings account, deposit or certificate of deposit for the same sum that meets section 11-35-101.

What the bond promises

The Attorney General's bond form names the Attorney General of Colorado for the use of the people of the State of Colorado and the administrator of the Fair Debt Collection Practices Act, and cites section 5-16-124 and Rule 3.04 of the CFDCPA Rules, 4 CCR 903-1. The agency must account for and pay over collections less the agreed collection charges, turn over clients' notes, papers and evidence of debt, and comply with the act. A surety ends the bond by registered mail notice, effective 30 days after the administrator receives it, and stays liable for two years after the license is surrendered, revoked or expires.

Fees and term

The Attorney General lists a $500 investigation fee, a $1,500 initial application fee and a $1,500 renewal fee. A license runs from issuance to the following July 1, and renewals are due by July 1 each year.

Eligibility and Requirements for a Colorado Collection Agency Bond:

Bond of $12,000 to $20,000 under C.R.S. 5-16-124, set by prior year client remittances.
Obligee: the Attorney General of Colorado for the use of the people of Colorado and the administrator.
Condition to pay over collections less agreed charges and turn over client papers.
Compliance with the Colorado Fair Debt Collection Practices Act and 4 CCR 903-1.
Surety liability continuing for two years after the license ends.

Colorado Collection Agency Bond FAQs:

How do I know which bond amount I need?

Take your average monthly sums remitted or owed to all clients during the previous year. At $15,000 or less the bond is $12,000. Each $10,000 or part of $10,000 above $15,000 adds $2,000, up to a $20,000 maximum.

We only buy debt. Do we need a bond?

Section 5-16-124 does not require a bond from a debt buyer as long as it does not also provide third-party debt collection. A debt buyer that also collects for others posts the bond.

Can I deposit money instead of buying a bond?

Yes. The statute accepts evidence of a savings account, deposit or certificate of deposit for the same sum, meeting the requirements of section 11-35-101.

Who does the bond protect?

The agency's clients. On written demand from the administrator, the agency must pay over collection proceeds, less the agreed charges, for the use of any client whose debt it took for collection.

When does the license expire?

Every collection agency license runs to the next July 1. Renewal opens in May and is due by July 1, with a $1,500 renewal fee.