Collection Agency Bonds: The Guarantee That Collected Money Gets Remitted
A collection agency bond is a statutory license bond with a specific first job: if your agency collects money on a client's accounts and fails to hand it over, the client recovers from the bond. State conduct rules ride along — most bond forms are also conditioned on complying with the state's collection act — but the fund-remittance guarantee is what regulators are really securing.
Amounts run from Washington's $5,000 to Florida's $50,000, and multi-state agencies carry one bond per state. The table below holds eight statute-verified requirements; for a premium estimate on your state, the collection agency bond calculator runs the math, or start a quote with your list of states.
- Every state's bond form, filed to its named obligee
- Multi-state packages quoted together — one application
- Consumer, commercial, and medical collection agencies
Two Promises in One Bond: Remit the Money, Follow the Act
A collection agency holds other people's money as a matter of routine — it collects on a creditor's accounts, deducts its contingency fee, and remits the balance. The bond secures that handoff. Washington's statute spells the condition out: the licensee must faithfully perform its client agreements and remit collected funds within 30 days of the close of the collection month (RCW 19.16.190). Michigan's bond covers a client's loss from the wrongful taking or failure to remit collected funds. The first beneficiary of a collection agency bond is the creditor client — the business that handed over its receivables.
The second promise is conduct. The federal FDCPA governs how third-party collectors may contact and treat debtors, but it carries no bond or license requirement of its own — that layer comes from the states. State collection acts condition the license on a bond, and the bond on compliance with the act: Florida's bond exists to protect credit grantors who suffer losses from violations of its consumer collection rules (Fla. Stat. §559.545), and Texas places its bond requirement inside the very chapter that codifies the state's debt collection conduct standards (Tex. Fin. Code Ch. 392).
Worth keeping straight: this is a license bond owed to the state and your clients — it is not insurance for the agency, and it is not a fidelity bond, which protects your own business against employee theft. Agencies that hold client trust accounts often end up carrying both. If you are sorting out which instrument does what, our primer on how surety bonds work covers the three-party structure, and the commercial bonds hub maps the wider license-bond family.
Which States Require a Collection Agency Bond — Verified Amounts
Every amount below was checked against the governing statute text. States differ on more than the dollar figure: some take a flat amount, some tier by collection volume, and a few let the regulator set the number per licensee.
Collection Agency Bond Requirements by State
Statute-verified amounts and filing details
| State | Bond Amount | Governing Law | Key Detail |
|---|---|---|---|
| Texas | $10,000 | Tex. Fin. Code §392.101 | Filed with the Secretary of State before any third-party collection activity — applies to in-state and out-of-state collectors alike |
| California | $25,000 minimum | Cal. Fin. Code §100019(e) | Payable to the DFPI Commissioner under the Debt Collection Licensing Act; the Commissioner can set a higher amount based on affiliates and collection volume; licensed through NMLS |
| Florida | $50,000 | Fla. Stat. §§559.545–559.546 | Consumer collection agencies; protects credit grantors who suffer losses; renewed annually with registration through the Office of Financial Regulation |
| Washington | $5,000 | RCW 19.16.190 | Cash deposit may substitute; conditioned on faithful performance of client agreements and remitting collected funds within 30 days; annually renewable |
| Arizona | $10,000–$35,000 | ARS §§32-1021, 32-1022 | Tiered to prior-year gross Arizona income: $10K (up to $250K), $15K ($250K–$500K), $25K ($500K–$750K), $35K (over $750K); cash or CDs may substitute |
| Michigan | $5,000–$50,000 | MCL 339.907 | Exact amount set per licensee by the licensing department; bond covers wrongful taking or failure to remit collected funds |
| Colorado | $12,000–$20,000 | CRS 5-16-119 | Sliding scale administered through the Department of Law collection agency program — run your number in our calculator |
| New York City | $5,000 | NYC Admin. Code Title 20 | City-level requirement tied to the NYC debt collection agency license through the Dept. of Consumer and Worker Protection |
Verified against statute text as of June 2026. Amounts and forms change — confirm the current requirement with the state regulator before filing, or ask us to confirm it for you.
Sources: statutes.capitol.texas.gov; leginfo.legislature.ca.gov; flsenate.gov; apps.leg.wa.gov; azleg.gov; legislature.mi.gov
Texas is the highest-volume requirement we handle: a flat $10,000 bond filed with the Secretary of State under Tex. Fin. Code §392.101, and it reaches any third-party collector working Texas debtors — including agencies headquartered elsewhere. It sits alongside the other statutory filings on our Texas surety bonds page.
California moved debt collectors under the Debt Collection Licensing Act, administered by the DFPI through NMLS. The floor is $25,000, but the Commissioner can require more based on the number of affiliates and dollar volume collected — so high-volume California agencies should budget for an amount above the minimum. Florida takes the largest flat amount on our verified list, $50,000, renewed annually with the consumer collection agency registration — one of several financial-services bonds on the Florida roster.
Arizona ties the amount to your prior-year gross income from Arizona business, in four steps from $10,000 to $35,000 — details on the Arizona hub. Michigan hands the decision to the regulator, anywhere from $5,000 to $50,000 per licensee (see Michigan bonds), while Washington keeps it simple at $5,000 and Colorado runs a $12,000–$20,000 sliding scale you can compute in the calculator. In New York, the bond requirement we have verified operates at the city level: New York City's $5,000 debt collection agency bond through the Department of Consumer and Worker Protection.
Collecting in a state not listed here? Requirements exist in many others and a handful of states impose none at the state level — tell us where you operate and we confirm the current amount, form, and obligee against the regulator's own materials before quoting. List your states here.
Multi-State Agencies: Bonds Stack, One Per State
There is no national collection agency bond. Each state names its own obligee on its own form — the Texas Secretary of State, California's DFPI Commissioner, Florida's Office of Financial Regulation — so an agency collecting in several states carries several bonds at once. An agency working Texas, Florida, and Washington files three instruments totaling $65,000 in penal sums ($10,000 + $50,000 + $5,000), each renewing on its own license cycle. At typical rates of 1%–5%, that package runs roughly $650 to $3,250 a year across all three.
The trigger is where you collect, not where you sit. Texas applies its bond to out-of-state collectors contacting Texas debtors; California licenses by collection activity through NMLS. The one reciprocity provision we have verified runs the other way: Washington permits an out-of-state agency to satisfy RCW 19.16.190 with a comparable bond already filed in its home state. Volume-tiered states add a wrinkle worth knowing — Arizona computes its tier only on gross income from Arizona business, so a national agency's small Arizona book may land in the $10,000 bracket even if total revenue is far higher.
Branch offices are the other variable: a few states size or multiply the bond by office or location rather than by company. Those rules are state-specific and change, so we confirm the branch treatment against the regulator's current materials for each state on your list rather than printing figures here. The practical upside of stacking is on the underwriting side — the surety evaluates your agency once, then issues every state's form from the same file, which is why quoting all your states together beats buying bonds one at a time. Agencies licensed across several financial-services lines often bundle further: money transmitter bonds and mortgage broker bonds follow the same state-by-state stacking logic.
What Triggers a Claim on a Collection Agency Bond
The statutes themselves describe the claim scenarios — and what follows once a claim lands.
Collected funds never reach the client
The core risk the bond exists for. An agency collects on assigned accounts, commingles or pockets the money, and the creditor client is left short. Michigan’s statute states this directly: the bond covers a client’s loss from the wrongful taking or failure to remit collected funds (MCL 339.907). Washington conditions its bond on remitting within 30 days of the close of the collection month (RCW 19.16.190).
Violations of the state collection act
State bond forms are typically conditioned on compliance with the licensing statute itself. Florida’s bond exists to protect credit grantors who suffer losses from violations of the state’s consumer collection practices rules (Fla. Stat. §559.545). Conduct that breaches the act — not just missing money — can support a claim, depending on the bond form.
A paid claim erodes the bond — and your license
When a surety pays, the penal sum is reduced and the licensee must make the surety whole under the indemnity agreement. California requires a replacement bond within 10 days after a claim is made against the original (Cal. Fin. Code §100019); operating without the full bond on file puts the license itself at risk.
Claims can outlive a cancelled bond
Cancellation does not instantly end exposure. In Michigan, claims may be filed up to one year after the bond is cancelled, and the surety must give the department 30 days’ notice before terminating. Build the replacement bond into your timeline before the old one lapses — not after.
The through-line: a collection agency bond is a continuing license condition, not a one-time filing. Letting it cancel without a replacement in place is functionally the same as letting the license lapse — our guide to surety bond cancellation walks through notice periods and how to swap sureties without a coverage gap.
How Much Does a Collection Agency Bond Cost?
You pay an annual premium, not the bond amount. As market practice, collection agency bonds price at roughly 1%–5% of the penal sum, with minimum premiums around $100 — personal credit of the owners is the biggest input, followed by agency financials and collection volume. Because most state amounts are modest, the absolute dollars stay small even at the high end of the rate range.
| State & Bond Amount | Strong Credit (~1%) | Challenged Credit (~5%) |
|---|---|---|
| Washington — $5,000 | ~$100 (minimum) | ~$250 |
| Texas — $10,000 | ~$100–$150 | ~$500 |
| California — $25,000 | ~$250 | ~$1,250 |
| Florida — $50,000 | ~$500 | ~$2,500 |
Estimates reflect typical market rates of roughly 1%–5% of the bond amount with ~$100 minimums; they are not quotes. Actual pricing is set in underwriting based on credit, financials, and collection volume.
Volume-tiered states change the input, not the math: pin down your Arizona tier or Colorado sliding-scale amount first, then apply the rate — the collection agency bond calculator handles both steps. Owners with credit problems can compare placement options through our bad credit bond programs; for a firm number across every state you work, request a collection agency bond quote.
How to Get a Collection Agency Bond
List every state where you collect
The licensing trigger is usually where the debtor is, not where your office sits. Texas, for example, requires out-of-state third-party collectors contacting Texas debtors to file the $10,000 Secretary of State bond. Map your collection footprint first.
Confirm each state’s amount and bond form
Amounts range from $5,000 flat to volume-tiered scales like Arizona’s — and a few regulators, like Michigan’s, set the figure per licensee. Each state has its own bond form naming its own obligee, so a generic bond will be rejected.
Apply once for the full package
One application covers every state on your list: agency name, states needing coverage, type of collections, and years in business. The surety underwrites the agency once and issues each state’s bond on its required form.
File each bond with its regulator
Bonds go to the named obligee — the Texas Secretary of State, Florida’s Office of Financial Regulation, NMLS for California’s DFPI — usually alongside the license or registration application. Keep renewal dates synced to each license cycle.
First license bond? The application process guide covers what underwriters ask for and how fast issuance runs.
Collection Agency Bond FAQs
State requirements, FDCPA context, pricing, and multi-state stacking
Which states require a collection agency bond?
What does the bond cover that the FDCPA does not?
How much does a collection agency bond cost?
Do I need a separate bond for every state I collect in?
What happens if my bond lapses or a claim is paid?
Can I get a collection agency bond with bad credit?
All content is researched from official state and federal sources (.gov) and verified before publication. BuySuretyBonds.com works with Treasury-certified, A-minimum rated surety carriers serving all 50 states.
Collecting in More Than One State?
List every state in the form — we confirm each amount and bond form against the regulator's current requirements and quote the whole package at once.