License Requirements

Debt collection licensing can be a confusing subject. While a few states don’t have licensing requirements for debt collectors, most do.However, requirements across the states are not uniform. Prior to obtaining a license, debt collectors need to determine which states require a license to collect debt as well as any potential licensing exemptions for out-of-state debt collectors and other conditions of licensure, such as trust accounts, bonds and licensing fees.You’ll need to review state license requirements carefully as certain debt collectors may be exempt. Often, in order to qualify for the out-of-state licensing exemption, debt collectors must not maintain a physical presence in the state and may only collect debts by use of interstate communications, which usually includes telephone, mail or fax.There are three types of collection agencies: