Alabama Telemarketing Bond

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Alabama Telemarketing Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain an Alabama Telemarketing Bond

At a Glance:

  • Lowest Cost: $500 per year based on the applicant’s credit
  • Bond Amount: $50,000
  • Who Needs it: All telemarketers operating in Alabama
  • Purpose: To ensure the public will receive compensation for any damages should the Telemarketer file for bankruptcy or breach contracts made with consumers
  • Who Regulates Telemarketers in Alabama: The Alabama Attorney General’s Office
Alabama Telemarketing Bond Form
Alabama Telemarketing Bond Form


The Alabama Telemarketing Act requires all telemarketers operating in the state to obtain a license with the Attorney General’s Office. The Alabama legislature enacted the licensing laws and regulations to ensure that telemarketers engage in ethical business practices. To provide financial security for the enforcement of the Licensing law,  telemarketers must purchase and maintain a $50,000 surety bond to be eligible for licensure.

What is the Purpose of the Alabama Telemarketing Bond?

Alabama requires telemarketers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the telemarketer fails to comply with the regulations set forth in the Alabama Telemarketing Act. Specifically, the bond protects the public in the event the telemarketer files for bankruptcy or breaches any contracts made with consumers. In short, the bond is a type of insurance that protects the public if a telemarketer breaks licensing laws.

How Can an Insurance Agent Obtain an Alabama Telemarketing Surety Bond?

BondExchange makes obtaining an Alabama Telemarketing bond easy. Simply log in to your account and use our keyword search to find the “telemarketing” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the Alabama Telemarketing Bond?

Surety companies will run a credit check on the owners of the telemarketing company to determine eligibility and pricing for the Alabama Telemarketing Bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Alabama Telemarketing Bond Cost?

The Alabama Telemarketing Bond can cost anywhere between $500 to $6,250 per year. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on the $50,000 bond requirement.

$50,000 Telemarketing Bond Cost

Credit Score Bond Cost (1 year)
720+ $500
680 – 719 $750
650 – 679 $1,000
600 – 549 $2,000
550 – 599 $3,750
500 – 549 $6,250

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

Who is Required to Purchase the Bond?

Alabama requires all commercial telephone sellers (telemarketers) to purchase a surety bond prior to obtaining a business license. Alabama statute 8-19A-3 defines a commercial telephone seller as any individual or business that makes unsolicited phone calls with the intention to sell goods or services.

Exemptions to this definition include:

  • Persons making unsolicited sales calls in isolation and not part of their regular course of business
  • Noncommercial unsolicited calls
  • Persons soliciting without:
    • Intending to close a sale on the call
    • Making a sales presentation
  • Licensed securities, commodities, or investment brokers/dealers/advisors and their associates
  • Newspaper and magazine solicitations
  • Book, video, or record club solicitations
  • Supervised financial institutions and their parent, subsidiary, and affiliate organizations
  • Licensed insurance brokers, agents, customer representatives, and solicitors
  • Cable televisions services solicitations
  • Certain business to business sales solicitations
  • Catalog, magazine, or periodical salespersons soliciting advertisements
  • Solicitations for the maintenance/repair of goods that have already been purchased
  • Telephone and utility companies as well as their authorized representatives
  • Persons licensed as funeral services businesses
  • Issuers, and their subsidiaries, of securities that are subject to Section 12 of the Securities Exchange Act of 1934
  • Solicitations for telephone answering services
  • Persons temporarily licensed to solicit transactions regulated by the Commodity Futures Trading Commission
  • Food and produce solicitations if the buyer does not spend more than $500
  • Solicitations to past customers
  • Retail businesses, that have been operating for at least 1 year, if the majority of their sales happen at their place of business and all products are offered for sale at their business location
  • Vacation time-sharing plan solicitations
  • Solicitations for biographical publications that are released annually
  • Telephone marketing companies that have been operating continuously for 5 years and 75% of its contracts are with persons that are exempt from licensing

Alabama Telemarketing Bond

How Do Telemarketers Apply for a License in Alabama?

Telemarketers in Alabama must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the licensing statutes for details on the process.

License Period – All Alabama Commercial Telephone Sales Licenses expire annually and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Telemarketers must purchase and maintain a $50,000 surety bond.

Step 2 – Complete the Application

All Alabama Commercial Telephone Seller License applications can be completed online here. Telemarketers must complete the application in its entirety, and pay a $500 fee. Additionally, telemarketers must register all salespersons that they employ. To register a salesperson, telemarketers must complete an application and pay a $50 fee. The application can be submitted online here.

How Do Alabama Telemarketers Renew Their Licenses?

Telemarketers should submit their completed renewal application, including a $500 renewal fee, online here. Additionally, telemarketers must pay a $50 annual fee for each of their registered salespersons. All Alabama Commercial Telephone Sales Licenses expire annually and must be renewed before the expiration date

What are the Insurance Requirements for Telemarketers in Alabama?

Alabama does not require telemarketers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Telemarketers must purchase and maintain a $50,000 surety bond.

How Do Alabama Telemarketers File Their Bond?

Telemarketers should mail the completed bond form, including the power of attorney, to the following address.

Office of the Attorney General
Consumer Protection
501 Washington Ave
PO Box 300152
Montgomery, Alabama 36130-0152

The surety bond requires signatures from both the surety company that issues the bond and a representative from the telemarketing company. The surety company should include the following information on the bond form:

  • Legal name and address of entity/individual(s) buying the bond
  • Surety company’s name and address
  • Date the bond is signed
  • Date the bond goes into effect

What Can Alabama Telemarketers Do to Avoid Claims Against Their Bonds?

To avoid claims on their bonds, telemarketers in Alabama must follow all Licensing regulations in the state, including some of the most important issues below that, tend to cause claim

  • Do not file for bankruptcy
  • Do not breach any contracts made with consumers

What Other Insurance Products Can Agents Offer Telemarketers in Alabama?

Alabama does not require telemarketers to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Alabama Telemarketer Customers?

Alabama conveniently provides a public database to search for active telemarketers in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

Alabama Telemarketing Bond