Debt Management or Credit Services Organization Bonds
What is an Illinois Debt Management or Credit Services Organization Bond?
Debt and Credit service professionals in Illinois must obtain surety bonds to ensure their organization conducts business in an ethical and lawful manner. The bond is for those engaged in the business of selling the services of a credit services organization within the meaning of the Illinois Credit Services Organizations Act. The conditions of the surety bond obligate the principal to comply with the provisions of the Act. Valid third party actions against the surety bond may include; failure to perform contractual services, misrepresentation, fraudulent credit record actions, and improperly receiving money for services.
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Why is an Illinois Credit Services Organization Bond Required?
Individuals damaged by any violation of the Credit Services Organizations Act by the bonded principal may bring an action of law against the principal and surety on this bond to recover such damages. Any person suffering from a violation of this Act may take such action against the credit services organization and against the surety company. The surety is liable only for actual damages and not the punitive damages as permitted under state law. The aggregate liability of the surety company for all persons damaged by a credit services organization's violation of this Act will in no event exceed the amount of the bond.
Additional Illinois Credit Services Organization Bond Resources & Links
The state of Illinois defines a "Credit Services Organization" as a person who, with respect to the extension of credit by others and in return for the payment of money or other valuable consideration, provides, or represents that the person can or will provide services as defined in the Credit Services Organization Act.
Credit services organizations, salespersons, agents, representatives, or any independent contractor who sells or attempts to sell the services of a credit services organization may not charge or receive any money or other valuable consideration prior to full and complete performance of the services the credit services organization has agreed to perform for or on behalf of the buyer, unless the credit services organization has obtained a surety bond issued by a surety company licensed to do business in Illinois such as Surety Bonds Direct.