Florida Credit Service Organization Bond: A Comprehensive Guide
This guide provides information for insurance agents to help credit service organizations obtain Florida Credit Service Organization Bonds
At a Glance:
- Lowest Cost: $100 per year or $10 per month, based on the applicant’s credit
- Bond Amount: $10,000
- Who Needs it: All credit service organizations operating in Florida
- Purpose: To ensure the public will receive compensation for any damages should the credit service organization fail to comply with the bond provisions
- Who Regulates Credit Service Organizations in Florida: The Florida Department of Banking and Finance
Background
Florida Statute 817.7005 requires all credit service organizations operating in the state to file a $10,000 surety bond with the Department of Banking and Finance. The Florida legislature enacted the bonding requirement to ensure that credit service organizations engage in ethical business practices. There is no state license requirement for credit service organizations in Florida.
What is the Purpose of the Florida Credit Service Organization Bond?
Florida requires credit service organizations to purchase a surety bond prior to conducting business operations. The bond ensures that the public will receive compensation for financial harm if the credit service organization fails to comply with the bond provisions. In short, the bond is a type of insurance that protects the public if the credit service organization engages in unethical business practices.
How Can an Insurance Agent Obtain a Florida Credit Service Organization Surety Bond?
BondExchange makes obtaining a Florida Credit Service Organization Bond easy. Simply login to your account and use our keyword search to find the “credit” 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 (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.
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Is a Credit Check Required for the Florida Credit Service Organization Bond?
Surety companies will run a credit check on the owners of the credit service organization to determine eligibility and pricing for the Florida Credit Service Organization bond. Owner’s 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 Florida Credit Service Organization Bond Cost?
The Florida Credit Service Organization surety bond can cost anywhere between $100 to $500 per year or $10 to $50 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $10,000 bond requirement.
$10,000 Credit Service Organization Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 680+ | $100 | $10 |
| 625 – 679 | $150 | $15 |
| 575 – 625 | $375 | $38 |
| 450 – 574 | $500 | $50 |
*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.
How Does Florida Define “Credit Service Organization?”
Florida Statute 817.7001 defines a credit service organization as any individual or business entity who performs one or more of the following services:
- Improves a buyer’s credit record, history, or rating;
- Obtains an extension of credit for a buyer; or
- Provides advice or assistance to a buyer with regard to the above services
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
Are Credit Service Organizations Required to Obtain a License in Florida?
Florida does not require credit service organizations to obtain a state issued license. However, many municipalities will require businesses to obtain a business permit prior to conducting operations. Insurance agents should advise their clients to check with their local municipal authority prior to offering credit repair services.
What Are the Insurance Requirements for the Florida Credit Service Organizations?
The State of Florida does not require credit service organizations to purchase any form of liability insurance. Credit service organizations must purchase and maintain a $10,000 surety bond.
How Do Florida Credit Service Organizations File Their Bond?
Credit service organizations should mail the completed bond form, including the power of attorney, to the following address:
State of Florida Department of Banking and Finance, Financial Investigations
Suite 2103
The Capitol,Tallahassee, Florida 32399-0350
The credit service organization surety bond requires signatures from both the surety company that issues the bond and a representative from the credit service organization. The surety company should include the following information on the bond form:
- Legal name and county of entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Bond amount
- Date the bond is signed
- Witness signatures for the principal and surety
What Can Credit Service Organizations in Florida Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, credit service organizations must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud or dishonesty
- Perform all agreed upon services to paying customers
What Other Insurance Products Can Agents Offer Credit Service Organizations in Florida?
Florida does not require credit service organizations to purchase any form of liability insurance. 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 Florida Credit Service Organization Customers?
Florida unfortunately does not display credit service organization information to the public. We suggest contacting a list service company or the Florida Secretary of State for a list of active credit service organizations in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.