Buffalo Collection Agency Bond: A Comprehensive Guide

August 3, 2021

Buffalo Collection Agency Bond

This guide provides information for insurance agents to help their customers obtain Buffalo Collection Agency Bonds

At a Glance:

  • Average Cost: $100 per year
  • Bond Amount: $5,000
  • Who Needs it: All collection agencies operating in the city of Buffalo, NY
  • Purpose:To ensure the public will receive compensation for any damages should the collection agency violate licensing law
  • Who Regulates Collection Agencies In Buffalo: The Buffalo Office of Licenses

Background

Buffalo code 140-1 requires all collection agencies operating in the city to obtain a business license. The Buffalo city legislature enacted the licensing laws and regulations to ensure that collection agencies engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, collection agencies must purchase and maintain a $5,000 surety bond to be eligible for licensure.

What is the Purpose of the Buffalo Collection Agency Bond?

Buffalo requires collection agencies 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 collection agency fails to comply with the regulations set forth in Buffalo code chapter 140. Specifically, the bond protects the public in the event the collection agency engages in any acts of fraud or breaches any contracts made with consumers. In short, the bond is a type of insurance that protects the public if the collection agency breaks licensing laws.

Buffalo Collection Agency Bond Form

Buffalo Collection Agency Bond Form

How Can an Insurance Agent Obtain a Buffalo Collection Agency Surety Bond?

BondExchange makes obtaining a Buffalo Collection Agency Bond easy. Simply login to your account and use our keyword search to find the “collection” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (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 Buffalo Collection Agency Bond?

No, a credit check is not required for the Buffalo Collection Agency Bond. Because the bond is considered relatively low risk, the same rate is offered to all collection agencies in Buffalo regardless of their credit history.

How Much Does the Buffalo Collection Agency Bond Cost?

The Buffalo Collection Agency Bond costs just $100 per year.

How Does The City of Buffalo Define “Collection Agency?”

Buffalo code 140-1 defines a collection agency as any business entity who collects, or advertises their ability to collect, debt on behalf of another entity.

Exemptions to this definition include:

  • Attorneys
  • Banking institutions
  • Businesses collecting their own debts

How do Collection Agencies Apply For a License in Buffalo?

Collection agencies in Buffalo must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the application form for details on the process.

License Period – The Buffalo Collection Agency License expires on September 30 every two years and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Collection agencies must purchase and maintain a $5,000 surety bond

Step 2 – Complete the Application

All Buffalo Collection Agency License application should be mailed to the following address:

Office of Licenses
65 Niagara Square / 301 City Hall
Buffalo, NY 14202-3303

Collection agencies must complete the application in its entirety, and submit the following items:

    • Company financial statements
    • Police record check
    • Corporate filing or DBA
    • $400 application fee

How Do Buffalo Collection Agencies Renew Their License?

Collection agencies will be notified on how to complete the renewal application prior to their license expiration date. Collection agencies should mail their completed renewal application, including any and all fees, to the following address:

Office of Licenses
65 Niagara Square / 301 City Hall
Buffalo, NY 14202-3303

The Buffalo Collection Agency License expires on September 30 every two years and must be renewed before the expiration date.

What Are the Insurance Requirements for the Buffalo Collection Agency License?

The city of Buffalo does not require collection agencies to purchase any form of liability insurance as a prerequisite to obtaining a business license. Collection agencies must purchase and maintain a $5,000 surety bond.

How Do Buffalo Collection Agencies File Their Bond?

Collection agencies should mail the completed bond form, including the power of attorney, to the following address:

Office of Licenses
65 Niagara Square / 301 City Hall
Buffalo, NY 14202-3303

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

  • Name of entity/individual(s) buying the bond
  • Surety company’s name
  • Date the bond is signed

What Can Buffalo Collection Agencies Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, collection agencies in Buffalo must follow all license regulations in the state, including some of the most important issues below that tend to cause claim

  • Do not engage in any acts of fraud
  • Do not breach any contracts made with consumers

What Other Insurance Products Can Agents Offer Collection Agencies in Buffalo?

Buffalo does not require collection agencies 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 Buffalo Collection Agency Customers?

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

2021-12-28T15:18:38-05:00