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What is a telemarketing bond?
A telemarketing bond is a type of surety bond which some states, including Florida, require call centers to obtain before they can legally place calls into those states. The most frequently-issued telemarketing bonds go to Florida. Telemarketing companies usually have to purchase this type of surety bond before even applying for or renewing their business licenses. There are three parties involved with every telemarketing surety bond that is issued: the principal, the obligee and the surety. The principal party is the telemarketing company that buys the bond as a guarantee that obligations will be met according to the bond’s terms. The obligee is the government agency that requires the bond in order to enforce industry regulations. The surety is the insurance underwriter that issues the bond and backs the principal’s ability to fulfill the bond’s requirements. Thus, a Florida telemarketing bond acts like an insurance policy to ensure that Florida residents are not harmed by a telemarketer’s conduct. For example, one type of violation is when telemarketers call consumers who are on a do-not-call list.
If a call center with a telemarketing bond violates Florida law, the Florida Attorney General can file a claim against the telemarketing bond, similar to filing an insurance claim against an insurance policy. If the bonding company confirms the violation, the bonding company will pay out the bond money to the State of Florida in order to refund Florida consumers who were harmed by the telemarketer’s conduct. Then the bonding company will seek reimbursement from the telemarketing company as if the bond had been a loan, and the call center must repay the bonding company. As long as a call center does not violate the law, the insurance company which issued the bond will only charge an annual premium to keep the bond in place.
How much does a telemarketing bond cost?
Florida law typically requires call centers to obtain a $50,000 bond. The cost of a bond’s premiums depend on a number of factors, including the applicant’s financial history, whether the applicant placed collateral, whether the applicant obtained co-signors, and the type of product the telemarketing company sells, as certain markets are considered riskier than others. High risk markets command higher bond premiums. Annual premiums typically range from about 1% to 10% of the total bond amount.
We at Simon Insurance Agency are experienced in helping our clients obtain any type of surety bond, including telemarketing bonds. Whether your credit is superior or subpar, we can assist you in securing your bond through our specialty market. Call us at 561.948.4141 to request a complimentary consultation and quote. We are here to help you secure your telemarketing bond.