Who Needs a Collection Agency License?
In Nebraska, an active license is required for any entity to conduct debt collection activities legally. This requirement applies to individuals as well as to partnerships, corporations, or other business entities.
What Does the Licensing Process Involve?
Collection agency licenses are issued by the Nebraska Secretary of State, specifically the Licensing Board. Here are the steps to get a collection agency license in Nebraska:
- Complete the Collection Agency License application form available on the Licensing page of the Secretary of State website.
- Gather the other documentation that must be submitted as part of your license application, including:
- Financial statements
- Certified copy of the entity�s Articles of Incorporation if applicable
- A list of all of the agency�s solicitors or collectors to be licensed
- Additional information as may be required (such as personal reference letters for individuals and partnerships applying for licensure)
- Purchase a Nebraska Collection Agency Bond in the required amount:
- $5,000 for less than 5 solicitors or collectors
- $10,000 for 5-15 solicitors or collectors
- $15,000 for more than 16 solicitors or collectors
- Pay the licensing and investigation fees (currently $200 each) and submit your completed application and supporting documents to the Licensing Board no later than the first day of the first month of the next scheduled review period (i.e., January 1, April 1, July 1, or October 1).
Why is a Surety Bond Required?
The purpose of the surety bond requirement is to provide protection for consumers against financial loss resulting from the illegal or unethical collection practices of a licensed collection agency. The bond is your guarantee to operate in full compliance with all applicable statutes; failure to do so will result in claims against the bond.
How Does It Work?
The terms of the surety bond agreement, a legally binding contract, detail what you must do to remain in compliance. Any party who suffers a financial loss stemming from your violation of those terms has the right to file a claim against your bond. Note that you are legally obligated to pay out claims if the surety company determines that they are valid.
If you aren�t able to pay a valid claim right away, the surety company will pay it on your behalf, but only as an advance to you. That doesn�t change the fact that in the eyes of the law, you are the one with sole responsibility for paying claims. Consequently, you must reimburse the surety for any such advance payment.
How Collection Agency Licensing Works in Nebraska
To purchase a Nebraska Collection Agency Bond, you’ll pay a premium that is only a small fraction of the required bond amount. The surety company will set a premium rate that is based largely on your personal credit score. If you have a great credit score, you could pay a premium that is as little as 1% of the required bond amount. The lower your credit score, the higher the premium rate you will pay.
Get Bonded Today
Request a quote online to get the bond you need in order to obtain or renew your license as a Nebraska collection agency.