Wyoming Collection Agency Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Wyoming Collection Agency Bond
At a Glance:
- Lowest Cost: 0.5% of the bond amount per year based on the applicant’s credit
- Bond Amount: $10,000 per licensed location
- Who Needs it: All collection agencies operating in Wyoming
- Purpose: To ensure the public will receive compensation for any damages should the collection agency fail to comply with licensing law
- Who Regulates Collection Agencies In Wyoming: The Wyoming Division of Banking
Wyoming statute 33-11-102 requires all collection agencies operating in the state to obtain a license with the Division of Banking. The Wyoming legislature enacted the licensing laws and regulations to ensure that collection agencies engage in ethical business practices. To provide financial security for the enforcement of the licensing law, collection agencies must purchase and maintain a $10,000 (per licensed location) surety bond to be eligible for licensure.
What is the Purpose of the Wyoming Collection Agency Bond?
Wyoming 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 licensing regulations set forth in Wyoming code Title 33 Chapter 11. Specifically, the bond protects the public in the event the collection agency fails to pay funds collected to creditors. In short, the bond is a type of insurance that protects the public if the collection agency breaks licensing laws.
How Can an Insurance Agent Obtain a Wyoming Collection Agency Bond?
BondExchange makes obtaining a Wyoming 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? 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 Wyoming Collection Agency Bond?
Surety companies will run a credit check on the owners of the collection agency to determine eligibility and pricing for the Wyoming Collection Agency 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 Wyoming Collection Agency Bond Cost?
The Wyoming Collection Agency surety bond can cost anywhere between 0.75% to 5% of the bond amount per year. 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 a $20,000 bond requirement.
$20,000 Collection Agency Bond Cost
|Credit Score||Bond Cost (1 year)|
|650 – 699||$200|
|625 – 649||$250|
|600 – 624||$300|
|550 – 599||$800|
|500 – 549||$1,000|
How Does Wyoming Define “Collection Agency?”
Wyoming statute 33-11-101 defines a collection agency as any business entity who engages in one or more of the following activities:
- Collects debt on behalf of Wyoming creditors
- Takes assignment of debts for collection purposes
- Uses a fictitious name to collect their own debts
How do Collection Agencies Apply for a License in Wyoming?
Collection agencies in Wyoming must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the NMLS’s application guidelines for details on the process.
License Period – The Wyoming Collection Agency License expires on December 31 of each year and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Collection agencies must purchase and maintain a surety bond with a limit of $10,000 per licensed location
Step 2 – Designate a Resident Manager
Applicants for the Wyoming Collection Agency License must designate a resident manager whose principal office is located in Wyoming and who has been licensed by the Wyoming Collection Agency Board.
Step 3 – Request a NMLS Account
The Wyoming Collection Agency License application is submitted electronically through the Nationwide Multistate Licensing System (NMLS). To submit a license application, applicants must first request to obtain an NMLS account.
Step 4 – Complete the Application
- Unaudited company financial statements
- The following company contacts:
- Primary consumer complaint
- Bank account information for the company’s operating and/or trust account(s)
- Disclosure questions
- Company business plan containing the following information:
- Marketing strategies
- Target markets
- Fee schedule
- Operating structure
- Certificate of Good Standing
- Samples of all documents used in the regular course of business
- Bank reference form
- Company formation documents
- Company management and organizational charts
Collection agencies must pay the following fees when submitting their license application:
- $500 application fee
- $36.25 background check fee (per person)
- $15 credit report fee (per person)
How Do Wyoming Collection Agencies Renew Their License?
Collection agencies can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Wyoming Collection Agency License expires on December 31 of each year and must be renewed before the expiration date.
What Are the Insurance Requirements for the Wyoming Collection Agency License?
Wyoming does not require collection agencies to obtain any form of liability insurance as a prerequisite to obtaining a business license. Collection agencies must purchase and maintain a surety bond with a limit of $10,000 per licensed location.
How Do Wyoming Collection Agencies File Their Bond?
Collection agencies should submit the completed bond form, including the power of attorney, electronically through the NMLS. The 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:
- Legal name and state of incorporation of entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Bond amount
- Date the bond goes into effect
- Date the bond is signed
What Can Wyoming Collection Agencies Do to Avoid Claims Against Their Bond?
In order to avoid claims made against their bond, collection agencies in Wyoming must ensure they pay all funds owed to Wyoming creditors.
What Other Insurance Products Can Agents Offer Collection Agents in Wyoming?
Wyoming 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 Wyoming Collection Agency Customers?
The NMLS conveniently provides a public database to search for active collection agencies in Wyoming. 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.