How to get your license: Collection agencies
Who needs a license?
If you solicit, collect, or attempt to collect claims for collection, you need:
- A Collection Agency License if:
- Your main office is in Washington State.
- Your main office is outside of Washington State and you have, or plan to have, clients located in Washington State.
- An Out-of-State Collection Agency License if:
- Your main office and all branch offices are located outside of Washington State.
- You don’t have any clients located in Washington State.
- You’re contacting debtors in Washington State who owe money to your out-of-state clients.
Debt buyers added to the definition of a collection agency
The 2013 Legislature adopted a new bill, ESHB 1822, that adds “debt buyers” to the definition of a collection agency. The new law:
- Makes all debt buyers and others who meet the definition of a collection agency subject to the Washington Collection Agency Act (RCW 19.16) and current administrative rules (WAC 308-29).
- Clarifies that licensees are prohibited from engaging in the unauthorized practice of law. This means that lawyers can practice law and also hold a collection agency license.
To get a license:
- Get a trust account.
- Maintain an office in Washington State, managed by a Washington resident.
To operate a collection agency:
- You may not begin business activity until you receive the required license.
- Washington is a closed-border state. You must have a license before contacting debtors or soliciting clients in Washington.
How to apply
To get a Collection Agency License or Out-of-State Collection Agency License:
- Complete all of the following:
- A Business License Application
- A Business License Application Supplement for Collection Agency, Branch Office, or Out-of-state Office for each business location.
- A Business Financial Statement/Balance Sheet showing all of the following:
- Liabilities and assets of the agency in 1 of the 3 months prior to application. For example, if you apply in May, we will accept a financial statement for either February, March, or April.
- $7,500 or more in cash or its equivalent. $5,000 of the cash must be deposited in a bank account used to operate the business.
- Equity, or net worth, of $7,500 or more.
- A $5,000 surety bond. Your insurance company must:
- A list of persons with more than 20% interest in the business.
- If applying for more than 1 location, a Location Addendum for each additional location.
- Enclose the appropriate fee (check or money order payable to the Department of Revenue).
- Mail your application with all supporting documents and fees to:
State of Washington
Business Licensing Service
PO Box 9034
Olympia, WA 98507-9034
Note: Please be sure to notify our office in writing of any address changes.