New legislation was recently introduced that 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.
