Wisconsin Credit Service Organization Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Wisconsin Credit Service Organization Bond
At a Glance:
- Lowest Cost: $250 per year or $25 per month
- Bond Amount: $25,000
- Who Needs it: All credit service organizations (CSOs) operating in Wisconsin
- Purpose: To ensure the public will receive compensation for any damages should the credit service organization violate registration law
- Who Regulates Credit Service Organizations In Wisconsin: The Wisconsin Department of Financial Institutions
Wisconsin statute 422.502 requires all credit service organizations operating in the state to register with the Department of Financial Institutions. The Wisconsin legislature enacted the registration laws and regulations to ensure that CSOs engage in ethical business practices. To provide financial security for the enforcement of the registration law, CSOs must purchase and maintain a $25,000 surety bond to be eligible for registration.
What is the Purpose of the Wisconsin Credit Service Organization Bond?
Wisconsin requires credit service organizations to purchase a surety bond as part of the application process to obtain a business registration. The bond ensures that the public will receive compensation for financial harm if the CSO fails to comply with the regulations outlined in Washington statute 422.502. Specifically, the bond protects the public in the event the CSO 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 CSO breaks registration laws.
How Can an Insurance Agent Obtain a Wisconsin Credit Service Organization Surety Bond?
BondExchange makes obtaining a Wisconsin 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.
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Is a Credit Check Required for the Wisconsin Credit Service Organization Bond?
No, a credit check is not required for the Wisconsin Credit Service Organization Bond. Because the bond is considered relatively low risk, the same low rate is offered to all CSOs in Wisconsin.
How Much Does the Wisconsin Credit Service Organization Bond Cost?
The Wisconsin credit services organization bond costs just $250 per year or $25 per month.
How Does Wisconsin Define “Credit Service Organizations”?
Wisconsin statute 422.501 defines a credit service organization who provides one or more of the following services:
- Improves a buyer’s credit record, history, or rating
- Obtaining an extension of credit for a buyer.
- Provides advice or assistance to a buyer with any of the above items
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 Credit Service Organizations in Wisconsin Obtain a Registration?
Credit service organizations in Wisconsin must navigate several steps to secure their business registration. Below are the general guidelines, but applicants should refer to the application form for details on the process.
Registration Term -The Wisconsin Credit Service Organization registration expires on December 1 of every even numbered year (2022, 2024 etc) and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Credit service organizations must purchase and maintain a $25,000 surety bond
Step 2 – Complete the Application
CSOs should mail their completed their completed registration application to the following address:
PO Box 8041
Madison, WI 53708-8041
CSOs must pay a $100 fee when submitting their registration application
How Do Wisconsin Credit Service Organizations Renew Their Registration?
Credit service organizations should mailt their completed renewal application, including a $100 fee, to the following address:
PO Box 8041
Madison, WI 53708-8041
The Wisconsin Credit Service Organization registration expires on December 1 of every even numbered year (2022, 2024 etc) and must be renewed before the expiration date
What Are the Insurance Requirements for Wisconsin Credit Service Organizations?
Wisconsin does not require credit service organizations to obtain any form of liability insurance as a prerequisite to obtaining a business registration. CSOs must purchase and maintain a $25,000 surety bond.
How Do Wisconsin Credit Service Organizations File Their Bond?
Credit service organizations should mail the completed bond form, including the power of attorney, to the following address:
PO Box 8041
Madison, WI 53708-8041
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 city of entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond is signed
- Date the bond goes into effect
What Can Wisconsin Credit Service Organizations Do to Avoid Claims Against Their Bond?
To avoid claims made against their bond, CSOs in Wisconsin must follow all registration regulations. Including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Honor all agreements made with consumers
What Other Insurance Products Can Agents Offer Credit Service Organizations in Wisconsin?
Wisconsin does not require credit service organizations to purchase any form of liability insurance as a prerequisite to obtaining a business registration. 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 Wisconsin Credit Service Organization Customers?
Wisconsin conveniently provides a public database to search for active credit service organizations in the state. The database can be accessed here. Contact BondExchange for help developing a marketing piece. Agents can also leverage our print-mail relationships for discounted mailing services.