Collection agencies need to have a bond to their name. It is just a part of Arizona state law and no collection agency bond in Arizona can ignore it without facing serious repercussions. The purpose of any bond for a collection agency is to protect the consumer. Collection agencies succeed when they respect these constraints, and they understand the duality that goes with both receiving payments from consumers and respecting their legal space.
The Fair Debt Collection Practices Act is the ultimate book for what a collection agency can legally do. The FDCPA is active in Arizona, and state law follows the outline of the FDCPA at the national level.
Most of the details specify that a debt collection agency cannot imitate another entity. In other words, they cannot enforce that they are the state of Arizona. They cannot state that they are a government entity or even a lawyer who is going to take legal action. The agency cannot say that they are a legal entity because that is a conflict.
All of this is detailed in the text. Importantly, a bond is required. The purpose of the bond here is to detail who is doing what and how. The state wants a record of the collection agency. The bond is that record. It is a documentation of the openness, fairness, and honesty of the agency. If the bond is written clearly, it will usually relieve some of the tension between the state and the agencies. Lawyers can even use the lack of a bond as a major point of contention, and it could result in a lawsuit against the agency.
Browse our website for more on the varying types of bonds. Many scenarios with a Collection Agency Bond in Arizona will require an authorized bond. The state wants that bond to help follow who is doing what work and how they are doing it. Subdivision developments always need a bond. Contractors need bonds for all projects and renovations, and business service bonds are available in a multitude of industries. Bonds affirm to the state that the project is being done, and what that project will encompass. A collection agency is not exempt from the need to receive bonds for their efforts.
