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Collection agencies that are located in or that contact consumers in Arkansas need to be licensed and bonded. Here’s how to get a license and surety bond in the state.
Arkansas collection agency licensing
The state defines collection agencies as third parties collecting on a client’s behalf, meaning that companies that collect on accounts for themselves are not included in that definition. They receive licenses through the Arkansas State Board of Collection Agencies. Collection agency licensees need to submit the following information to the Board for consideration:
- Completed, notarized application
- Completed, notarized�Proposed Manager Information form
- Completed Registration of Collectors form
- Surety bond in the correct amount
- $125 licensing fee
- $20 fee for agency manager + $20 fee per collector
- Organizational chart showing agency’s parent companies and/or affiliates
The applicant must also have good credit and be of good character. Review the application instructions to be sure all required materials are submitted.
Collection agencies’ licenses expire annually on June 30 and renewal applications must be received by the Board by May 15. Late renewals not submitted by July 15 incur a $125 late fee and operating after license expiration can incur fines of up to $500 per day.
Bonds for collection agencies
Arkansas collection agencies need surety bonds as part of the licensing process, and their bond amount is based on the number of collectors at the agency. The scale is as follows:
- Five or fewer collectors�$10,000 surety bond
- Six to 12 collectors�$20,000 surety bond
- 13 or more collectors�$25,000 surety bond
A separate bond is required for each location where collections business is conducted. Failure to obtain or keep the bond current can result in loss of licensure. The bond ensures that Arkansas collection agencies follow the state’s Rules and Regulations for the industry and adheres to the provisions of the Arkansas Code Annotated (ACA). The ACA includes the Arkansas Fair Debt Collection Practices Act, which are laws preventing harassment and misrepresentation by collectors and setting guidelines for communication with consumers. Collection agencies are also expected to adhere to the federal Fair Debt Collection Practices Act.
Get started on the Arkansas collection agency licensing process by getting a surety bond today!