How do I become a collection agency in Texas?

Posted on April 27, 2020
by Laura Bush
April 27, 2020
0 comments

Table of Contents

How do I become a collection agency in Texas?

Licensing Requirements Texas does not license collection agencies, but third-party debt collectors must file a $10,000 surety bond with the Texas secretary of state in order to operate legally within the state.

What is the collection law in Texas?

Texas and Federal Law The federal Fair Debt Collection Practices Act (FDCPA) protects debtors from harassment, threats, and unfair means of debt collection by debt collectors. This law only applies to third party debt collectors. The Texas debt collection law can be found in Chapter 392 of the Texas Finance Code.

How do I start my own collection?

Start a debt collection agency by following these 10 steps:

Plan your Debt Collection Agency.
Form your Debt Collection Agency into a Legal Entity.
Register your Debt Collection Agency for Taxes.
Open a Business Bank Account & Credit Card.
Set up Accounting for your Debt Collection Agency.

Do you need a license to collect debt in Texas?

Texas debt collectors don’t need to obtain a license or register with the state. However, the Texas Secretary of State requires debt collectors to purchase a collection agency surety bond, more accurately referred to as a Third Party Debt Collector bond, in the amount of $10,000.

How much can a collection agency charge in fees in Texas?

In Texas, the holder of a dishonored check or the third-party debt collector collecting the face value of the check may also collect a reasonable fee, not to exceed $30 and applicable sales tax on the fee. Failure to pay the fee can result in lost check-cashing privileges with creditors.

Do debt collectors have to be licensed in Texas?

Do debt collection agencies have to be registered?

All debt collection agencies are legally required to be regulated by the Financial Conduct Authority (FCA), which CPA are. If you go on to the Cash Protection Agency website you will see the FCA badge at the footer of the website.

Can debt collectors sue you in Texas?

Third-party debt collector (a debt collector who is not the original creditor) generally cannot sue in Texas without filing a bond with the Texas Secretary of State.