What is a Hawaii Collection Agency License Surety Bond?

A Hawaii Collection Agency License Bond is a type of surety bond required by the Hawaii Department of Commerce and Consumer Affairs for entities that wish to legally operate a debt collection business within the state. This bond is a financial guarantee issued by a surety company on behalf of the collection agency, ensuring that the agency will adhere to the state laws and regulations pertaining to debt collection. It serves as a buffer between the collection agency and the consumers, offering protection to the latter from potential misconduct or fraudulent practices by the agency.

The amount of the bond varies depending on the volume of annual collection receipts. It is set at a minimum of $25,000 for agencies with receipts less than $50,000 and can go up to $500,000 for those with receipts exceeding $10 million. The cost of obtaining the bond, typically a small percentage of the total bond amount, is borne by the collection agency as part of their licensing process.

The bond acts as a safeguard for the consumers, allowing them to claim compensation in case of financial loss due to the agency's unlawful actions. It also ensures that the collection agency operates within the guidelines established by the Fair Debt Collection Practices Act, and the Hawaii Revised Statutes.

In essence, the Hawaii Collection Agency License Bond is not just a regulatory requirement but a significant part of consumer protection mechanism. It fosters trust and transparency, creating a safer environment for both the consumers and the collection agencies.

How much does a Collection Agency License Surety Bond cost in Hawaii?

In the state of Hawaii, all licensed Collection Agencies must provide to the state a $25,000 HI Collection Agency License Bond for their main office.  Any satellite office or additional location will require an additional bond of $15,000 per additional location

• $25,000 HI Collection Agency Bond is instantly issued without additional underwriting for $250 per year
• $15,000 HI Collection Agency Bond is instantly issued without additional underwriting for $150 per year, per location

Who needs a Hawaii Collection Agency License Surety Bond?

Operating a collection agency in the state of Hawaii necessitates obtaining a Collection Agency License Bond. This stipulation not only ensures the ethical conduct of collection agencies but also safeguards the rights of consumers. More specifically, this bond is needed by the following entities:

• Collection Agencies: These are firms that collect debts owed by consumers or businesses, usually for a fee or a percentage of the total amount owed.
• First-party agencies: These are departments or subsidiaries of the original creditor that collects debts in their own name.
• Third-party agencies: These are external agencies contracted by a creditor company to collect debts on their behalf.
• Debt Buyers: These are entities that purchase debt portfolios from creditors or other businesses at a fraction of the face value of the debt, with the intention of collecting the debt themselves or reselling the debt to other buyers.
• Active debt buyers: These entities directly engage with the debtor to collect the outstanding amounts.
• Passive debt buyers: These entities purchase debts with the intention of outsourcing the collection process to third-party agencies.

How do I get my Collection Agency License Surety Bond in Hawaii?

To secure a Collection Agency License Bond in Hawaii, entities must first complete a comprehensive application process, which includes furnishing necessary documentation, demonstrating financial stability, and meeting specific legal criteria. The process commences with the collection agency filling the application form provided by the Department of Commerce and Consumer Affairs (DCCA) in Hawaii. The form requests details about the agency, such as its business name and address, the names of the owners, and their professional experience in the field.  Next, they must meet the legal criteria set forth by the DCCA. This involves adhering to the Professional and Vocational Licensing (PVL) requirements, such as having a registered agent in Hawaii, a physical business address in the state, and proof of a surety bond.  Get your HI Collection Agency License bond today!  Simply complete our online application, pay for your bond and you will receive an email copy prior to the original being mailed out to you to sign and file for your license.