(1)Each licensee shall maintain at all times and
each applicant shall file, prior to the issuance of any license to the applicant, a bond
in the sum of twelve thousand dollars plus an additional two thousand dollars for
each ten thousand dollars or part thereof by which the average monthly sums
remitted or owed to all of its clients during the previous year exceed fifteen
thousand dollars; or, in the alternative, an applicant or licensee shall present
evidence of a savings account, deposit, or certificate of deposit of the same sum
and meeting the requirements of section 11-35-101. The total amount of the bond
shall not exceed twenty thousand dollars and shall be in favor of the attorney
general of the state of Colorado for use of the people of the state of Colorado and
the admi
Free access — add to your briefcase to read the full text and ask questions with AI
(1) Each licensee shall maintain at all times and
each applicant shall file, prior to the issuance of any license to the applicant, a bond
in the sum of twelve thousand dollars plus an additional two thousand dollars for
each ten thousand dollars or part thereof by which the average monthly sums
remitted or owed to all of its clients during the previous year exceed fifteen
thousand dollars; or, in the alternative, an applicant or licensee shall present
evidence of a savings account, deposit, or certificate of deposit of the same sum
and meeting the requirements of section 11-35-101. The total amount of the bond
shall not exceed twenty thousand dollars and shall be in favor of the attorney
general of the state of Colorado for use of the people of the state of Colorado and
the administrator. The bond shall be executed by the applicant or licensee as
principal and by a corporation that is licensed by the commissioner of insurance to
transact the business of fidelity and surety insurance as surety. If any such surety,
during the life of the bond, cancels the bond or reduces the penal sum of the bond,
the surety immediately shall notify the administrator in writing. The administrator
shall give notice to the licensee that the bond has been canceled or reduced and
that the licensee's license shall automatically expire unless a new or increased
bond with proper sureties is filed within thirty days after the date the administrator
received the notice, or on a later date as is stated in the surety's notice.
(2) The bond shall include a condition that the licensee shall, upon demand in
writing made by the administrator, pay over to the administrator for the use of any
client from whom any debt is taken or received for collection by the licensee the
proceeds of the collection, less the charges for collection in accordance with the
terms of the agreement made between the licensee and the client.
(3) A client may file with the administrator a duly verified claim as to money
due the client for money collected by a licensee. If the administrator makes a
preliminary determination that a claim meets the requirements of this section, the
administrator shall make a demand for the amount claimed. The demand may be
made on the licensee, the surety, or both.
(4) If a receiver has been appointed by any court of competent jurisdiction in
the state of Colorado to take charge of the assets of any licensee, the receiver,
upon the written consent of the administrator, may demand and receive payment on
the bond from the surety and, upon order of the court, may bring suit upon the bond
in the name of the receiver, without joining the administrator as a party to the
action.
(5) If a client has filed a duly verified claim with the administrator, who has
refused to make demand upon the licensee or surety, the client may bring suit
against the licensee or surety on the bond for the recovery of money due from the
licensee without assignment of the bond to the client. Nothing in this section shall
preclude a client from making a demand on both the licensee and the surety.
(6) (a) The bond shall include a condition that the licensee shall, upon written
demand, turn over to the client any and all notes, valuable papers, or evidence of
indebtedness which may have been deposited with the licensee by the client, but
the licensee shall not be required to return any such papers, notes, or evidence of
indebtedness on debts in process of collection, unless reimbursed by the client for
the services performed on the debt so evidenced.
(b) Debts in process of collection means any debts that have been in the
licensee's hands for less than nine months, debts on which payments are being
made, or on which payments have been promised, debts on which suit has been
brought, and claims that have been forwarded to any other collection agency or
attorney.
(7) The bond shall cover all matters placed with the licensee during the term
of the license granted and any renewal, except as provided in this section. Such
bond may be enforced in the manner described in this section, by a receiver
appointed to take charge of the assets of any licensee, or by any client if the
administrator refuses to act. The aggregate liability of the surety, for any and all
claims that may arise under the bond, shall not exceed the penalty of the bond.
(8) Any licensee, at any time, may file a new bond with the administrator. Any
surety may file with the administrator notice of withdrawal as surety on the bond of
any licensee. Upon filing of a new bond or on expiration of thirty days after the filing
of notice of withdrawal as surety by the surety, the liability of the former surety for
all future acts of the licensee shall terminate, except as provided in subsection (9)
of this section. The administrator shall cancel the bond given by any surety
company upon being advised its license to transact the business of fidelity and
surety insurance has been revoked by the commissioner of insurance and shall
notify the licensee.
(9) No action shall be brought upon any bond required to be given and filed,
after the expiration of two years from the surrender, revocation, or expiration of the
license issued thereunder. After the expiration of two years, all liability of the
surety upon the bond shall cease if no action has been commenced upon the bond
before the expiration of the period.
(10) In lieu of an individual surety bond, the administrator may authorize a
blanket bond covering qualifying licensees in the sum of two million dollars in favor
of the attorney general of the state of Colorado for use of the people of the state of
Colorado and the administrator. Each new and renewal applicant shall pay a fee in
an amount determined by the administrator to offset the applicant's share of the
blanket bond. Conditions and procedures regarding the bond shall be as set forth in
this section for individual bonds.
(11) This section does not apply to a person collecting or attempting to
collect a debt owned by the person collecting or attempting to collect the debt.
(12) A bond shall not be required of a debt buyer as long as the debt buyer
does not also provide third-party debt collection.