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Auction Bond Information
In many states of the US and auctioneer must lodge a bond policy with the state before being allowed to become a practising auctioneer.
With an auction bond, consumers are protected from the misrepresentation of items that are up for auction, as well as the substitution of goods between the auction and collection. The bond also protects consumers against any other acts of fraud that may be committed by the auctioneer.
Bond prices and policy amounts differ greatly between states, you should check with your local government agency to see what kind of cover you require before setting up your policy.
The bond comes into effect when a consumer alleges that an auctioneer has not upheld the terms of the bond or has committed an illegal act. The claims department of the bond issuer will investigate the claim before making a decision about the validity of the claim. If the claim is found to be valid, your bond issuer will ensure that the auctioneer meets any terms or regulations that have been missed before reimbursing the consumer of any financial loss that may have been suffered due to the negligence or purposely fraudulent acts of the auctioneer.
If you have not had to apply for a bond before, the process can seem invasive and time consuming. This is true, but it is necessary. The broker that you are applying to for a bond needs to make sure that you are the right kind of person that they want to associate their company with. High risk applicants, those who have bad credit rating or a history of fraud may not qualify to become auctioneers.