Telemarketing Bonds

Learn more about Telemarketing Bonds

What is a telemarketing bond?

Telemarketing bonds (also known as phone solicitor bonds) are legally binding agreements between three parties: telemarketers, the government agency responsible for regulating local telemarketing activity, and a surety company.

The government agency is the Obligee and establishes the obligations that the telemarketer (the Principal) must follow. The surety (also called bonding company) issues the bond guaranteeing the performance of the telemarketer.

Why do you need a telemarketing bond?

Telemarketing bonds are often required of telemarketing companies for obtaining a license to call residents within a specific state. Some states that require a surety bond include Alabama, Colorado, Florida, and Kentucky. 

When the surety company issues the bond, they provide the government agency a guarantee that the individuals contacted by the telemarketer will receive payment for financial losses resulting from a violation of the statutes and regulations set forth by the telemarketing license.

If the telemarketer fails to meet the obligations set out by the government agency, the surety will pay out any damages up to the bond amount. The telemarketer is ultimately liable for the losses and is legally required to reimburse the surety company for any damages paid under the bond.

How much does a telemarketing bond cost?

Telemarketing surety bond costs vary depending on the total bond amount and the premium rate. The government agency sets the required bond amount and the surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium.

Premium rates for telemarketing bonds typically cost between 2% and 5% of the total bond amount. Most telemarketing bonds require credit checks. During the application process, the surety company evaluates your financial strength and industry experience. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a telemarketing bond. EZ Surety still offers competitive rates to individuals with low credit scores or other financial issues.


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