Pennsylvania Collector-Repossessor Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Pennsylvania Collector-Repossessor Bonds
At a Glance:
- Lowest Cost: $100 per year or $10 per month
- Bond Amount: $5,000
- Who Needs it: All collectors and repossessors operating in Pennsylvania
- Purpose: To ensure the public will receive compensation for any damages should the collector-repossessor violate licensing law
- Who Regulates Collectors-Repossessors In Pennsylvania: The Pennsylvania Department of Banking and Securities
Background
The Pennsylvania Motor Vehicle Sales Finance Act requires all collector-repossessors operating in the state to obtain a license with the Department of Banking and Securities. The Pennsylvania legislature enacted the licensing laws and regulations to ensure that collectors-repossessors engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, collector-repossessors must purchase and maintain a $5,000 surety bond to be eligible for licensure.
What is the Purpose of the Pennsylvania Collector-Repossessor Bond?
Pennsylvania requires collector-repossessors 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 collector-repossessor fails to comply with the regulations set forth in the Pennsylvania Motor Vehicle Sales Finance Act . Specifically, the bond protects the public in the event the collector repossessor engages in any acts of fraud or fails to pay any required taxes and fees. In short, the bond is a type of insurance that protects the public if the collector-repossessor breaks licensing laws.
How Can an Insurance Agent Obtain a Pennsylvania Collector-Repossessor Surety Bond?
BondExchange makes obtaining a Pennsylvania Collector-Repossessor Bond easy. Simply login to your account and use our keyword search to find the “collector” 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.
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Is a Credit Check Required for the Pennsylvania Collector-Repossessor Bond?
No, a credit check is not required for the Pennsylvania Collector-Repossessor Bond. Because the bond is considered relatively low risk, the same rate is offered to all collector-repossessors in Pennsylvania regardless of their credit history.
How Much Does the Pennsylvania Collector-Repossessor Bond Cost?
The Pennsylvania Collector-Repossessor bond costs just $100 per year or $10 per month.
How Does Pennsylvania Define “Collector-Repossessor?”
The Pennsylvania Motor Vehicle Sales Finance Act defines a collector-repossessor as any business entity who collects payments on installment sale contracts or who repossess motor vehicles when the borrower defaults on their loans. To qualify as a collector-repossessor, the business must act as an independent contractor and may not be employed by the sales finance company.
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.
How Do Collector-Repossessors Apply for a License in Pennsylvania
Collector-repossessors in Pennsylvania 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 Pennsylvania Collector-Repossessor License expires on October 1 of each year and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Collector-repossessors must purchase and maintain a $5,000 surety bond
Step 2 – Complete the Application
All Pennsylvania Collector-Repossessor license applications should be mailed to the following address:
Pennsylvania Department of Banking and Securities
Non-Depository Licensing Office
17 N 2nd St, Ste 1300
Harrisburg, PA 17101-2290
Collector-Repossessors must complete the application in its entirety, and a $350 fee.
How Do Pennsylvania Collector-Repossessors Renew Their License?
Collector-repossessors will be contacted prior to their license’s expiration date on how to renew their license. All renewal applications, including the $250 renewal fee, should be mailed to the following address:
Pennsylvania Department of Banking and Securities
Non-Depository Licensing Office
17 N 2nd St, Ste 1300
Harrisburg, PA 17101-2290
The Pennsylvania Collector-Repossessor License expires on October 1 of each year and must be renewed before the expiration date.
What Are the Insurance Requirements for the Pennsylvania Collector-Repossessor License?
Pennsylvania does not require collector-repossessors to purchase any form of liability insurance as a prerequisite to obtaining a business license. Collector-repossessors must purchase and maintain a $5,000 surety bond.
How Do Pennsylvania Collector-Repossessors File Their Bond?
Collector-repossessors should mail the completed bond form, including the power of attorney, to the following address:
Pennsylvania Department of Banking and Securities
Non-Depository Licensing Office
17 N 2nd St, Ste 1300
Harrisburg, PA 17101-2290
The collector-repossessor surety bond requires signatures from both the surety company that issues the bond and a representative from the company applying for licensure. The surety company should include the following information on the bond form:
- Legal name, address, and phone number of entity/individual(s) buying the bond
- Surety company’s name, address and phone number
- Date the bond is signed
- Date the bond goes into effect
What Can Pennsylvania Collector-Repossessors Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, collector-repossessors in Pennsylvania must ensure that they 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
- Pay all funds owed to lenders
- Pay all required taxes and fees
What Other Insurance Products Can Agents Offer Collector-Repossessors in Pennsylvania?
Pennsylvania does not require collector-repossessors 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 other types of 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 Pennsylvania Collector-Repossessor Customers?
Pennsylvania conveniently provides a public database to search for active collector-repossessors 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.