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Surety Bond for New York Debt Collectors Proposed

The state of New York is considering joining the 21 other states that currently have a bond requirement in place for debt collectors.  Anyone who has been pestered by debt collectors in the past should be in favor of this bill.  The surety bond puts real financial consequences behind existing regulations of debt collectors giving added incentive to make sure they follow the rules.

 SB 219/AB 455 would require debt collection agencies to be licensed and post a surety bond, contract of indemnity, or an irrevocable letter of credit that must be payable to the people of New York.  The bond amount would be based on the number of persons employed by the licensee.  A $10,000 bond would be required for one to four employees; a $25,000 bond for five to nine employees; a $50,000 bond for 10 to 20 employees, and a $75,000 bond for 20 or more employees.  The bond would secure the licensee’s compliance with the applicable law and the payment of all costs and penalties.  The surety’s total liability would be limited to the face amount of the bond, regardless of the number or nature of claims made against the bond or the number of years the bond remained in force.

This is a good law.

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