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State by State Collection Agency Requirements

State Licensing Requirements for Collection Agencies

Last Updated: May 24, 2016

A collection agency is business that pursues individuals or businesses for payments on debts owed. For example, let's say you stopped paying on your credit card and it has been over 120 days or so since your last payment. Chances are, that credit card company has hired a collection agency to go after you to collect the debt. Now you are going to be hounded by a collection agency for the money you owe.

There are three types of collections agencies:

  1. First-Party Agencies. These are oftentimes subsidiaries of the original creditor.
  2. Third-Party Agencies. These are companies which are contracted by the original creditor to collect debts on their behalf for a fee.
  3. Debt Buyers. These companies purchase debts at a percentage of the value and then attempt to collect it from the debtor.

Each state has their own licensing requirements for collection agencies. Some states require a collection agency to have a license and some do not - some require a bond in order to do business and some do not. It is important you know what state licensing requirements are needed in your state for collection agencies. Because, if you are being harassed by a collection agency that is not licensed in your state, you can file a complaint with the FTC and have them investigated.

Below is a chart broken down by state to show which states require a license to operate. It is always a good idea to check your state's government site just to make sure but this a quick reference.

State

License Required

Bond Required

Certificate of Authority

State Filing Fee

AK
Yes Yes Yes $300 - 600
AL
No No Yes N/A
AZ
Yes Yes Yes $1,500
AR
Yes Yes Yes $140
CA
No No Yes N/A
CO
Yes Yes Yes $300
CT
Yes Yes Yes $500 - 900
DC
No No No N/A
DE
No No No N/A
FL
Yes Yes Yes $200 - 500
GA
No No No N/A
HI
Yes Yes Yes $120 - 215
IA
Yes Yes Yes $10
ID
Yes Yes Yes $150
IL
Yes Yes Yes $750
IN
Yes Yes Yes $100
IA
Yes Yes Yes $10
KS
No No No N/A
KY
No No No N/A
LA
Yes No Yes $25
MA
Yes Yes Yes $1,300
MD
Yes Yes Yes $700
ME
Yes Yes Yes $200 - 400
MI
Yes Yes Yes $225
MN
Yes Yes Yes $1,050
MO
No No No N/A
MS
No No No N/A
MT
No No No N/A
NC
Yes Yes Yes $1,000
ND
Yes Yes Yes $700
NE
Yes Yes Yes $400
NH
No No No N/A
NJ
Yes Yes Yes $25
NM
Yes Yes Yes $500
NY
No No No N/A
OH
No No No N/A
OK
No No No N/A
OR
Yes Yes Yes $350
PA
No No No N/A
RI
Yes No Yes $210
SC
No No No N/A
SD
No No No N/A
TN
Yes Yes Yes $150
TX
No No No N/A
UT
Yes Yes Yes $32
VA
No No No N/A
VT
No No No N/A
WA
Yes Yes Yes $340
WI
Yes Yes Yes $1,200
WV
Yes Yes Yes $500
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