Illegal Bail Practices

I was driving last Sunday when an ad came on the radio for Aladdin Bail Bonds. Intrigued, I turned up the volume in time to catch the ad telling listeners to go with their agency, because other agencies only give you “gobbledygook.” I smiled to myself. The “gobbledygook” of the bail industry is what I had been thinking about for weeks. Heck, my whole criminal law and policy class had been thinking about it for weeks. Let me tell you, dear reader, about the “gobbledygook” of the bail industry, in the form of all the illegal practices that get bail agencies into trouble.

As I talked about in my last post, the bail industry is fiercely competitive. This has led some bail agents to turn to illegal bail practices to stay in the game. Just last year, a sting brought down 31 bail agents in 5 of our local counties (Santa Clara, Alameda, Mon20800521029_9d77204ea8_nterey, San Benito and Merced County). In Santa Clara County, the sting involved some of our most prominent bail agencies: Aladdin Bail Bonds, All-Pro Bail Bonds, and Bail Hotline Bail Bonds. The sting, ironically named “Operation Bail Out,” was put together through cooperation between the California Department of Insurance and the Santa Clara County District Attorney’s office. This cooperation was long overdue. The California Department of Insurance had been receiving complaints against bail agents for years. As early as 2013, there were so many complaints that the Department of Insurance thought it necessary to send out a “reminder” letter of solicitation laws to all licensed bail agents in California.

Even local bail agents themselves had been pushing for better enforcement of bail laws. The former President of the Santa Clara County Bail Association told me that he had been recommending enforcement of the laws for years. Frustrated with the illegal practices of other bail agencies, he had been pushing for there to be a Department of Insurance regulatory officer placed in our area. There currently is none, and having one would help the Department of Insurance investigate claims of illegality. He even supported the idea of bail agencies paying a $10 fee on every posted bond that would be paid to the Department of Insurance to fund this. But his complaints and suggestions got nowhere.

So what exactly gets bail agents into trouble? Let’s examine the ways.

Surprise Bail Outs

Only licensed bail agents are allowed to negotiate with potential clients. (10 CCR § 2068, Cal Ins Code § 1800) One illegal practice is what I will call “surprise bail outs,” where bail agents bail out newly incarcerated inmates without even speaking to them. A person going through booking gets news that his bail has been posted, though he has never negotiated with a bail agent. He may think: “perhaps a family member posted bail for me?” It is only when he gets out of jail that he realizes a bail agency posted bail for him without having ever discussed it with him or his family.

One bail agent I spoke to had received calls from people in this exact situation. Now stuck in a contract with a bail agency, they began to panic and would call him for help. How can they get out of the contract? He would try his best to help these people by going over to the offending bail agency and by telling them that as a fellow bail agent, he knows what they are doing is highly illegal, and that they need to release this man from the contract or else he will report them to the police and Department of Insurance. This usually worked, and the person was freed from any obligations to pay the bail agency.  But one can imagine that many victims of this practice would not know who to turn to, and would be stuck in contracts that they never agreed to.

New Inmate Tips

Operation Bail Out arrested bail agents for this sort of illegal activity. Bail agents are not allowed to get tips about who might need their services.  Specifically, bail agents cannot enter into agreements with a law enforcement officer or a person incarcerated in a jail to get information about the existence of a criminal complaint, the fact of an arrest, or the fact that an arrest is about to happen. (10 CCR § 2076) Some bail agents illegally pay inmates for tips on who has been newly incarcerated so that they can jump on the new business opportunity.

In addition, the former President of the Santa Clara County Bail Association told me that he suspects some agencies have been able to penetrate the computer systems of the main jail, hacking the system to know exactly when new inmates are going through booking procedures. They can then check bail amounts and “spot good bail” during the booking process. This allows bail agencies to know exactly who to target with their services. They can get a head start on all other bail agencies. Once a new inmate is housed, they can go to admin booking and be ready to pay their bail. This is illegal because even though this is not a traditional “tip” from an informant in jail, it involves bypassing security procedures and goes against the spirit of the law, which is to deter bail agents from doing targeted soliciting of bewildered and vulnerable newly incarcerated individuals.

“Bail Bullies”

Bail bullies are people who have been hired by a bail agency to encourage newly incarcerated inmates to choose one bail agency over other options. Some bail bullies may have even been hired by a bail agency to be arrested. A new inmate going through booking will be approached by a “bail bully” who encourages them to call a specific bail agency, rather than the other agencies who are advertised in the jail. Sometimes, this goes beyond encouragement. The bail bully may say to call a certain bail agency “If you don’t want your kids getting hurt while walking to school…” Bail bullies can especially prey upon people who are in jail for the first time.

The use of bail bullies goes against many laws. Laws surrounding solicitation are especially emphasized in the California Insurance Code and California Code of Regulations. First of all, only licensed bail agents can solicit or negotiate undertakings of bail bonds. They may not directly or indirectly permit any person to solicit or negotiate on their behalf.  (10 CCR § 2068, Cal Ins Code § 1800). Not even a surety insurer can do so directly, but must instead work through a licensed bail agent. (Cal Ins Code § 1800). Solicitation includes advertising and any activity in arranging for paid bail. (Cal Ins Code § 1800b) Paying bail bullies to harass other inmates clearly falls within the realm of illegal solicitation, since they are in essence advertising for a bail agency in jail, and they are not licensed bail agents.

Solicitation laws also focus on prohibiting bail agents from soliciting in certain locations. ‘Bail agents shall not solicit any person for bail in any prison, jail, or other place of detention of persons, court or public institution connected with the administration of justice; or in the halls or corridors adjacent thereto.’ (10 CCR § 2074). This is also reiterated in the CA Penal Code, which says that “No bail licensee may employ, engage, solicit, pay, or promise any payment, compensation, consideration or thing of value to any person incarcerated in any prison, jail, or other place of detention for the purpose of that person soliciting bail on behalf of the licensee. A violation of this section is a misdemeanor.” (California Penal Code Section 160). The jail is one of those protected places that bail agencies may not use to solicit bail agency services. The use of bail bullies in jail flagrantly goes against this and can result in a criminal penalty.

Foreclosure

Another illegal activity is when bail agents use small defaults to foreclose on properties that families put up as collateral. First, families are charged outrageous fees for recovery expenses and fall behind in their payments to bail agencies. Then these fees soon balloon into debt so high that the only recourse is foreclosure of their family home. One such local story can be read here, where an original premium of only $1,500 turned into a nightmarish debt of $100,000 and resulted in the foreclosure on an elderly man’s home.

Bail agencies are generally only allowed to charge their customers the premium amount for a bail bond (usually 10% of the overall bail amount). (10 CCR 2082) But the law does allow for a few exceptions. One exception is for the “actual, necessary and reasonable expenses incurred in connection with the individual bail transaction.” (10 CCR 2081(c)) Such expenses include: guard fees, notary fees, recording fees, necessary long distance telephone expenses, travel expenses outside of the county where the bail was arranged, and a reasonable posting fee charged by a licensee operating in a county other than that where the bail was arranged. (10 CCR 2081(c)(2)) These fees come into play when a person skips their court appearance and must be recovered by the bail agency.

Another exception allows bail agencies to reimburse themselves for “actual reasonable and necessary expenses incurred and caused by a breach by the arrestee of any of the terms of the written agreement.” (10 CCR 2081(d)) This seems to apply to the situation where bail agencies charge excessive late fees for missed payments. However, there are limits to what bail agencies can charge: “such reimbursement(s) may not exceed the penal amount of such undertaking or bond.” (10 CCR 2081(d))

Bail agents may try to stretch the limits of what is “reasonable” under these exceptions. However, any fees found to fall outside the scope of reasonableness set forth in the exceptions above will be found to be illegal under California Code of Regulations Title 10 Section 2082.   As the man said in the article linked to above, “$19,500? Where did he have to go to get her — Peru? She was in Mariposa.” Such recovery expenses outside the realm of reasonableness are illegal. With better enforcement of these codes, a bail agent could not just charge people with ridiculous fees that soon grow into a huge amount of debt resulting in the foreclosure.

In conclusion, not only is the bail industry a competitive one, it also has many harmful side effects caused by those bail agents who feel the need to turn to illegal practices in order to get ahead. I have been told by many agents that this is a “cutthroat” business. It clearly is. Whatever your stance on the bail industry itself, we need to be aware of the reality of the current industry. If we continue with a commercial bail system, these are the sorts of harmful and illegal practices that may result. This may be one reason to eliminate money bail altogether– or perhaps this may be a reason to just reform our current system and focus on better enforcement of the laws regulating the bail industry.

 

 

 

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