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Who Is Required To Purchase a Check Seller & Deferred Deposit Bond In California?
There are four main license classifications that are required to purchase a surety bond. These classifications are:
Check Sellers
This license is responsible for selling checks, money orders, or drafts used by others for payments of obligations or the transfer of money.
Bill Payers
This license receives money as an agent of a debtor to pay bills, typically as a responsibility for ensuring a re-negotiated payment plan is followed.
General Proraters
This license receives money or some asset of value for a debtor for the purpose of distribution among creditors in payment for all or partial repayment.
Special Prorater
This license pays a customer's bills as part of their management or consumer's affairs.
Deferred Deposit (Payday Lenders)
This license allows a licensee to issue payday loans to consumers for a fee of no more than 15% of the check amount.
What is the Bond Amount For Each License
The bond amount is the maximum amount of financial protection extended to customers in the event they are victims of a purposeful and fraudulent action that financially harms them.
Here are the bond amounts for each license.
Check Seller Bond Amount
| Check Sellers Bond Amount | Click to Get Pricing |
|---|---|
| $500,000 | Click for Quote |
If you have a net-worth of at least $1,000,000 of which $150,000 are liquid assets you can reduce the required bond amount to $100,000.
Bill Payers and Proraters
| Bill Payers & Proraters Bond Amount | Click to Get Pricing |
|---|---|
| $25,000 | Click for Quote |
Deferred Deposit
| Deferred Deposit Bond Amount | Click to Get Pricing |
|---|---|
| $25,000 | Click for Quote |
Why is a California Check Seller & Deferred Deposit Bond Required?
Remember, as a licensed professional responsible for the finances and payments of your customers, you're obligating yourself to conduct business with fair and ethical business practices.
The Department of Financial Protection and Innovation want to license only the most reputable individuals and businesses.
The only way to hold check sellers, bill payers, and proraters accountable to the promises they make as a licensed professional is through the surety bond requirement.
It's unfortunate that every year there will be a small number of licensed professionals who purposefully and financially harm their customers to increase profits.
Examples of these actions might include:
- Charging fake fees for services
- Charging fees higher than legally allowed
- Stealing money or misappropriating money to personal accounts
- Creating fake debt obligations to siphon money
- Failing to pay debt obligations and flat out stealing money
If a customer or client is financially harmed by these or similar actions, they can make a claim against the surety bond for financial compensation.
Any individual claim and the total of all claims can only be as high as the required bond amount.
How Much Does a Check Seller & Deferred Deposit Bond Cost?
These surety bonds are going to be credit driven.
This means your price is going to be custom and determined primary using these three factors:
- The primary credit of the owner or owners
- Business and financial experience
- Any prior bonding and licensing history if applicable
Based on these factors a surety will quote a rate. A surety is an insurance company that underwrites these types of surety bonds.
While every surety uses the same factors to determine a rate, they come back with vastly different quotes. Each surety's process and risk tolerance is unique.
This is how we can help you save hundreds, even thousands of dollars if your bond amount is larger.
How to Save Considerable Money When Purchasing Your Bond
At Surety Bonds Direct, we are a surety agency. We work with the highest A-rated sureties specializing in financial services surety bonds.
- We will price shop for you when you request a price quote
- We'll collect all the different rates from these sureties
- And deliver to you the lowest possible rate and price
It's our job to make purchasing your surety bond easy.
Plus there's no obligation to purchase through us when you get your price.
We just want the opportunity to earn your business and make your life easier.
California Check Seller, Bill Payer, and/or Prorater Bond Price Example
Here's how significant the price savings can be when the rates are different by one, two, even three percentage points.
We'll use a $100,000 bond amount for the example. But just imagine how large the price differences are with the $500,000 bond amounts.
| Bond Amount | Premium Rate | Total Cost |
|---|---|---|
| $100,000 | 0.05% | $500 |
| $100,000 | 1% | $1,000 |
| $100,000 | 1.5% | $1,500 |
| $100,000 | 2% | $2,000 |
| $100,000 | 3% | $3,000 |
These payments are a one time payment for a 12 month bond term. More on the bond term below.
Depending on your bond amount, you can easily save one to two thousand dollars purchasing your bond.
Even with the $25,000 bond amount, your savings can be in the hundreds of dollars.
Get your exact price in less than one business day.
Click here and complete our quote form. It's fast to fill out and if you prefer to speak with a person, call a bond specialist at 1-800-608-9950.
How Long Does a Check Seller & Deferred Deposit Bond Last?
Remember when you purchase, it's one payment for a 12 month bond term.
During the purchase process, you choose an effective date. This is your activation date for your bond.
One year from this effective date you'll need to pay a renewal premium on the bond to keep it active.
This is another great reason to work with a surety agency like Surety Bonds Direct.
You get assigned a bond specialist who will manage your bond for you. Your bond specialist will contact you 30 to 45 days in advance to make sure the renewal premium is paid on time so your bond remains active.
Once you pay the renewal premium, you don't have to do anything else. Your bond is active and you can continue selling vehicles.
Get Your Bond Pricing Today
You can get instant pricing for your check seller and deferred deposit surety bond. Click the button below. You need to know the amount of your bond.
Need Help? Call Us Today
Talk to a bond specialist today. They will help you find the surety bond you need and get you the lowest possible price. 1-800-608-9950
Check Seller & Deferred Deposit Bonds And Getting Your California Business License/Registration
The licensing process is straightforward when you don't qualify and choose not to employ agents.
- Meet the required net-worth requirements
- Purchase your surety bond
- Complete your application and paperwork
If you plan on employing agents you'll have additional and more strict requirements:
- Higher net-worth requirements
- Purchase your surety bond
- Prove experience in the type of license you're paying to obtain
- Go through a criminal background check
- And show a history of compliance with regulatory requirements
When you're ready to get pricing and purchase your surety bond, fill out our online quote form or call a bond specialist at 1-800-608-9950.
Additional California Check Seller & Deferred Deposit Bond Resources & Links
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