California Telemarketing Bond
All California telephonic sellers must get licensed with the Attorney General's Office. One of the main requirements to get this license is obtaining a $100,0000 California telemarketing surety bond. This license bond is also sometimes called a solicitor bond.
However, no matter what you call this bond, it always involves three parties:
Principal – the telemarketer that needs to get bonded.
Obligee – the one requiring the bond (California Attorney General's Office).
Surety – the bond company or insurance agency that issues and financially backs the bond.
It is important to know that while the total amount of this bond is $100,000, that is not how much the surety bond costs. You only need to pay a small percentage of the full bond amount to get bonded—we go over this in more detail in the sections below.
What is a California Telemarketing Bond?
A California telemarketing bond is a surety bond required for all telemarketers, phone solicitors, and telephonic sellers operating or soliciting in California.
This surety bond is a licensing requirement set by the Office of the Attorney General to help ensure that all CA telephonic sellers adhere to the laws and ethics related to the profession. More specifically, the telemarketing sales rules outlined in the Code of Federal Regulation: Title 16, Chapter 1 and California Law: Business and Profession Code section 17511.1.
Prohibited acts include, but aren't limited to:
- Credit card laundering.
- Falsifying and misrepresenting product information.
- Fraudulent charitable solicitations.
- Threats, intimidation, and use of profane language.
- Initiating any outbound telephone calls to numbers on a "do not call list".
- Failing to provide required disclosures, such as seller identity, call purpose, etc.
If a telemarketer or telemarketing company partakes in these activities, any party that experiences losses or damages due to the telemarketer's negligence can make a claim against the bond. The surety that underwrites the bond initially pays for any valid claims (up to the full amount of the bond). However, the principal is then required to pay them back in full.
You always want to avoid bond claims as they are costly and can make it more difficult to get bonded in the future.
Telemarketing Bond Requirements
California Telemarketing Bond Amount: $100,000
Additional Bond: If a telephonic seller offers a promotion with a value of $500 or more, they will need an additional telemarketing bond (referred to as Surety Bond Form B in the telephonic seller registration forms). The amount for this bond varies but may reach up to $500,000.
How do I Get a California Telemarketing Bond?
Step 1: Find a Surety Company
Evaluate the surety company you are applying with to ensure they:
- Are licensed to issue bonds in California.
- Offer California telemarketing bonds.
- Are well-established with good reviews.
Looking for the best price? Larger surety providers, such as JW Surety, offer the most competitive rates thanks to the large number of bonds they underwrite.
Read How to Choose the Right Surety for more money-saving tips and information.
Step 2: Apply for the Surety Bond
You can apply for a bond over the phone or with an online bond application. Online applications are highly recommended if you are in a time-crunch as they instantly provide a free surety bond quote.
Step 3: Sign the Agreement
Sign the agreement, email or fax it back to your bond provider, and pay your invoice. Once everything is processed, you will receive an email copy of the surety bond. Additionally, the original bond will be sent to you in the mail.
Step 4: Submit Your Bond
The last step of the bonding process is to send the original bond to:
California Attorney General's Office
Consumer Law Section
Attn: Telemarketing Unit
300 S. Spring St., Suite 1702
Los Angeles, CA 90013
How Are Bond Claims Handled for Telemarketing Companies?
In the event that a telemarketer fails to comply with the laws and ethics of the profession, a claim can be made against their bond as reparation for any losses and damages. If this happens:
- There will be an investigation to determine if the bond claim is valid.
- The bond holder will be notified and likely asked to supply additional information.
- If the claim is deemed valid, the surety that issued the bond will pay the claim amount.
- The bond holder will then have to pay back the surety in full, plus any legal fees.
How Much Does a CA Telemarketing Bond Cost?
A California telemarketing bond costs an average of 1% – 3% ($1,000 - $3,000) of the total bond amount ($100,000) for those with good credit. You can also get this surety bond with bad credit, but the premium will be higher (often 5%-10%). These higher premium bonds are sometimes referred to as "bad credit surety bonds."
Surety Bond Name: California Telemarketing Bond
Surety Bond Amount: $100,000
|Credit Score||Above 675||Between 600-675||Below 599|
|Yearly Premium||$1,000 - $3,000||$3,000 - $5,000||$5,000 - $10,000|
*Note that the pricing above is an estimate based on an underwriting process that looks only at credit score. Other factors, such as past bonding history and financials, may also be considered for some bond applications. Get a free quote to see your personalized estimate.
With an online application, you can get a telemarketing bond in as little as one business day. Phone applications for this type of bond are still relatively speedy and can often be completed within a couple of days.