Posted in Bonds

The Role of the Collection Agency Bond in Phoenix Today

The Role of the Collection Agency Bond in Phoenix Today Posted on January 27, 2017

Few people enjoy dealing with debt collectors, and there are often good reasons to be wary of them. Because debt collectors are tasked with persuading people who have already defaulted to finally pay up, they sometimes seem inclined to be less than friendly or accommodating in their communications. While most debt collection agencies do their best to make sure that employees abide by all the laws and regulations that cover their activities, some few bad apples tend to give the industry a mixed reputation. Recognizing this, regulators are always looking for ways to ensure that debt collectors remain squarely within the bounds of the law, whether by imposing penalties for breaches or creating positive incentives.

One such measure that has proved to be fairly effective in Arizona is the requirement that registered debt collection agencies post bonds before doing business. Should a single breach of the law occur and be documented, that bond will typically be forfeited, giving the agency a financial incentive to ensure that this does not happen. Agencies that have been found to have violated the law at least once will also often be required to post even larger bonds, with the discipline and incentives that result encouraging them to get back on track.

Beyond the financial exposure that such a bond creates, however, this requirement has few downsides for agencies. Acquiring a Collection Agency Bond in Phoenix from a company like Southwest Bond Services tends to be an extremely straightforward, routine matter. Although some young agencies will have never worked through the process before, having access to the expertise of those who write and issue bonds will mean that few problems will normally be expected.

The details of each individual Collection Agency Bond in Phoenix will differ from the next, with bond writers striving to understand the particulars of each client before making an offer. A collection agency with an unblemished record of abiding by all the relevant laws and regulations, for example, will typically pay only a very small premium in order to have a bond written. Knowing this also creates a positive incentive to respect the laws that are designed to ensure that collection agencies treat debtors fairly and with respect.

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