Surety bond fraud is issuing fake surety bonds by fraudulent companies, self-proclaimed bond agents, or the principals. The construction sector is chock-full of instances where contracting companies give fake bonds to their employees to get jobs. While they do fly under the radar most of the time, if a situation does occur where you need a bond’s cover, they won’t be any help.
Here’s how to avoid surety bond fraud.
1. Read the Bond
When a surety bond company issues you a bond, check if it has the company’s seal. Proceed only if it does. Check that the verbiage, dates, agent names, bond details, and formats are in accordance with state laws.
If something feels off, that’s because it probably is. Take the bond producer to task immediately; request correction if there’s a mistake, and take appropriate action if you suspect fraud.
2. Check for License
Before requesting a license and permit bond, make sure the one signing it has a license to do so. More often than not, insurance agents validate surety bonds. Don’t shy away from demanding they show you their license and ID or looking them up on the Internet.
It might offend the legit ones, but if they have nothing to hide, they shouldn’t hesitate to show you their permits.
3. Check Bond Validity
Request contact information of everyone involved on the bond at the time it’s being issued. That way, you can easily contact the insurance agent who’s the signatory on your bond to make sure it’s valid. If you can’t take their word for it, you could always go straight to the surety producer.
4. Detect Red Flags
The biggest giveaway that a surety company is fraudulent if it’s named similar to another, much famous company.
There are also other flags on their websites you could check for, such as misinformation or inconsistency in information from website to social media accounts, and vice versa. You should also see if there are important claims missing from the website, like where they’re allowed to write surety.
5. Work with An Established Surety Company
Perhaps the best way to verify if a bond is real is by approaching one with a good reputation. Working with an experienced bond producer will lessen the work you have to do a great deal. Not only will you not have to follow the previous steps with a reputable company, but the process will be streamlined to require as little of your intervention as possible.
Rest easy by working with our surety agency. We have been issuing federally approved bonds since 2001. If we were fraudulent, you’d know it by now.
We have a surety bond for every one of your personal and professional needs, and our custom bonds make up for the ones not mentioned on our platform.
From license and permit to court bonds, and the odd immigration bond, there is no shortage of sureties in our portfolio.
Take your pick and apply for a bond today. Head here for queries.