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Collection
Agency Licensing Requirements: The laws governing the licensing and practices of collection agencies are set forth in Chapter 649 of the Nevada Revised Statutes. Any person who engages in the business of collecting claims for others, or of soliciting or advertising in any manner for the right to collect or receive payment for another of any claim in the State of Nevada is required to obtain a license from the Commissioner of Financial Institutions Division, Department of Business and Industry, of the State of Nevada. This requirement shall, however, not apply to employees of collection agency, banks, nonprofit cooperative associations, abstract or escrow companies, and attorneys licensed to practice law in the State of Nevada. (NRS 649.075.) In addition, an applicant for a collection agency license must supply a bond between $25,000 and $50,000 (NRS 649.105.) Collection agencies in the State of Nevada must maintain a physical office in the state and be operated by a person who holds a valid Manager's certificate issued pursuant to the provisions NRS 649.175 et seq., NRS 649.305. It must maintain signed contract with each of its customers (NRS 649.334), and a separate trust account for the deposit of funds collected. (NRS 649.355.) Detailed information on collection agency licensing requirements may be obtained from: State of Nevada Department of Business and Industry Financial Institutions Divisions 406 E. Second Street, Capitol Complex Carson City, Nevada 89710 (702) 687-4259 2501 E. Sahara Avenue, Suite 300 Las Vegas, Nevada 89104 (702) 486-4120
Department of Business & Industry Financial Institutions Division 2501 E. Sahara Avenue, Suite 300 Nevada Financial Institutions Division The Financial Institutions Division (FID) is charged with the enforcement of regulations and licensing of thirteen types of financial entities, including depository, lending, collection and money transmission activities. Additionally, certain individuals operating within these licensed entities are themselves required to be licensed or subject to personal background investigations. Background investigations are conducted on entities and individuals having substantial control of a licensed company’s activities. Laws governing each type of license set different percentage controlling factors which determines the requirements to perform a background investigation. This information is taken from an electronic brochure prepared by the Financial Institutions Division, which covers frequently-asked questions about licensing.You may download the entire brochure from the Dept of Business & Industry . Select Financial Institutions. (In Adobe Acrobat® format). The applicable Nevada Revised Statutes (NRS) and the Nevada Administrative Code (NAC) sections indicated by the Financial Institutions Division have been linked below. Chapter 649COLLECTION AGENCY (NRS & NAC 649): Physical office required in Nevada. License required for solicitation by telephone or mail to attempt to collect a debt in Nevada on behalf of a Nevada client. An out of Nevada Collection Agency attempting to collect into Nevada on behalf of an out of Nevada client is exempt from licensing, provided those activities are limited to interstate communication (ie: telephone, fax, or mail). Background investigation required on principal owning or acquiring control of company. A surety bond must be filed with the commissioner. The amount of the bond is between $25,000 and $50,000, determined by the amount of average monthly collections received by the agency. Trust accounts must be maintained in a Nevada Bank. All printed forms require prior approval by FID. COLLECTION MANAGER (NRS & NAC 649): Every Collection Agency must have a Licensed Collection Agency Manager available to oversee the day-to-day activities.Manager must have at least 2 years prior collection agency experience (at least 1 year in previous 18 months). Pass written test covering NRS & NAC 649, Federal Fair Debit Collection Practices Act, allowable interest (NRS Chapter 99), trust account maintenance, and statement balancing. Test required to be given at least twice a year (usually March & September).DEBT ADJUSTER (NRS & NAC 676): Covers arrangements by a third party between debtor & creditor for repayment of debt. Furnish surety bond to Commissioner $10,000 to $50,000 determined by monthly amounts processed. Background investigation required of all principals owning or acquiring control of the company. Trust account required to be maintained in Nevada bank. May not operate a Collection Agency. Chapter 676 NAC-676
See the Nevada Administrative Code (NAC) sections NAC 649. A few interesting provisions are reproduced below. 649.040 "Secondary collection agency" defined. "Secondary collection agency" means a collection agency which engages directly or indirectly in the solicitation or encouragement of debtors to pay delinquent debts directly to the debtors’ creditors through the use of machine derived form letters. [Banking Div., Collection Agency Reg. No. 110 part C, eff. 5-3-74]
649.050 Machine derived form letters: Approval by administrator. 1. All machine derived form letters must be submitted to the administrator for review and approval before their actual use by the collection agency. 2. No collection agency may use any machine derived form letter unless it has received prior written approval from the administrator. [Banking Div., Collection Agency Reg. No. 130, eff. 5-3-74]—(NAC A by Admstr. of Financial Institutions, eff. 6-29-84)
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OPINION NO. 98-20 COLLECTION AGENCIES; CONTRACTS; INTEREST; If clearly authorized by the creditor, a collection agency may collect whatever interest on a debt its creditor would be authorized to impose. A collection agency may not impose interest on any account or debt where the creditor has agreed not to impose interest or has otherwise indicated an intent not to collect interest. Simple interest may be imposed at the rate established in NRS 99.040 from the date the debt becomes due on any debt where there is no written contract fixing a different rate of interest, unless the account is an open or store account as discussed herein. In the case of open or store accounts, interest may be imposed or awarded only by a court of competent jurisdiction in an action over the debt. Please read the full actual opinion of Attorney General Frankie Sue Del Papa. OPINION NO. 98-20 COLLECTION AGENCIES; CONTRACTS; INTEREST; |
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See additional information, including opinions and The Bureau of Consumer Protection on the site of the Hon. Frankie Sue Del Papa, Attorney General of the state of Nevada, linked here. Lawdog assumes no responsibility for links away from this site. Copyright © 1998 by LAWDOG.COM Publishing, Inc |
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