Surety Bond Encyclopedia

Collection Agency ($5,000) Bond - City of Buffalo, New York in New York

Brief Summary

Every City of Buffalo collection agency license expires on September 30, no matter when it was issued, and it cannot be renewed without a $5,000 bond on file. Getting the bond right the first time matters because the City's Corporation Counsel reviews its form and the Comptroller reviews its sufficiency before the license issues. You pay an annual premium, not the $5,000.

Buffalo City Code Chapter 140 requires anyone who collects, advertises to collect or attempts to collect debts for others in the City of Buffalo to hold a collection agency license and to deposit a $5,000 surety bond payable to the City of Buffalo. The bond is filed with the Commissioner of Permit and Inspection Services, and the license expires on September 30 following issuance.

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How to Apply for a Collection Agency ($5,000) Bond:

Confirm you are not exempt as an attorney, a bank or a business collecting only its own debts.
Complete the Buffalo collection agency license application with rate schedule and five year history.
Obtain a police record check as the Office of Licenses requires for collection agencies.
Have a New York authorized surety issue the $5,000 bond payable to the City of Buffalo.
Deposit the bond with the Commissioner of Permit and Inspection Services before the license issues.
Pay the license fee set in Chapter 175 of the City Code.
Renew before September 30 each year with the fee and a current bond.

Detailed Information About the New York Collection Agency ($5,000) Bond:

Who needs the license and bond

Section 140-1 of the Buffalo City Code bars any person, firm or corporation from collecting, advertising to collect or attempting to collect debts for others without a license. Three groups are exempt: attorneys practicing law, banks acting within their legal authority, and anyone collecting only debts that belong exclusively to them. A business collecting its own receivables does not need this license. A third party agency does, even if it is licensed elsewhere.

The $5,000 bond

Section 140-9 requires a bond in the penal sum of $5,000, payable to the City of Buffalo, signed by the applicant as principal and by a surety company authorized to do business in New York. The Corporation Counsel approves it as to form and the Comptroller as to sufficiency, and it is deposited with the Commissioner of Permit and Inspection Services before the license is issued.

The bond guarantees that the agency will comply with Chapter 140 and will pay damages caused to any person by misstatement, misrepresentation, fraud, deceit or any unlawful act or omission of the agency, its agents or employees. Anyone damaged may sue on the bond, but the action must be brought within one year after the cause of action accrued. Section 140-8 separately requires every licensee to account for and pay over all money collected to the people entitled to it.

Application and renewal

Under section 140-2 the application lists the names and addresses of the principals, the character and location of the business, a schedule of the rates the agency proposes to charge, a five year business history, the applicant's financial responsibility and any criminal convictions. The Commissioner investigates every applicant. The Office of Licenses requires a police record check for collection agencies along with ID, a utility bill, a tax ID or DBA or corporate filing receipt, and proof of the business premises. The license fee is set in Chapter 175 of the City Code.

Under section 140-5 every license expires on September 30 following issuance. Renewal under section 140-7 requires payment of the license fee and filing of the bond again.

How the premium is set

The surety prices the bond on the $5,000 penal sum and the credit and collection experience of the owners. Because claims can come from any person harmed by the agency's conduct, underwriters also look at complaint history and how collected funds are handled.

Eligibility and Requirements for a New York Collection Agency ($5,000) Bond:

Surety company authorized to do business in New York.
City of Buffalo named as obligee in the penal sum of $5,000.
Bond approved as to form by the Corporation Counsel and as to sufficiency by the Comptroller.
Government photo ID, utility bill and tax ID or business filing receipt.
Proof of property ownership or a commercial lease for the business location.

New York Collection Agency ($5,000) Bond FAQs:

When does my Buffalo license expire?

On September 30 following the date it was issued, under section 140-5 of the City Code. A license issued in August still expires that September 30, so plan the bond term around that date.

Who is exempt from the license and bond?

Attorneys practicing law, banks acting within their legal authority, and anyone collecting only debts that are their own exclusive property.

Who can make a claim on the bond?

Any person, partnership, association or corporation damaged by the agency's failure to comply with Chapter 140, or by misrepresentation, fraud, deceit or an unlawful act of the agency or its staff. The suit must be filed within one year after the cause of action accrued.

Where is the bond filed?

It is deposited with the Commissioner of Permit and Inspection Services through the Office of Licenses at 65 Niagara Square, Room 301 City Hall, Buffalo, after approval by the Corporation Counsel and the Comptroller.

Can I transfer the license if I sell the agency or move?

No transfer is allowed. Section 140-11 bars transferring a license to any other person, partnership, firm or corporation, so a buyer applies for its own license and bond. Section 140-10 also limits the business to the location named in the license.