When “Libre” does not mean Freedom

In my past posts I have identified several issues with the lack of safeguards in immigration bond proceedings. During the course of my research I called several bond companies and inquired about their services. In this post I want to explore what happens when immigration judges set bond amounts that are too high for families to afford and they are forced to contract with bond companies.

Immigration bond, if paid directly to ICE, needs to be paid in full. When bond is set at an amount that a detainee and their family cannot afford, they often contract with bond companies to get a “surety bond” – a promise that they will either pay the full amount or comply with other terms as set in the contract. Most companies require collateral, usually in the form of a house with enough equity, a credit card with enough credit to cover the full amount of the bond, cash, or a combination of these three assets. One of the bail bond agents I spoke with claimed that there is a 90% chance that if the bond is paid directly to ICE the bond will be “lost”; not refunded once the proceeding is over.

Most bond companies also charge a one-time premium, based on the total bond amount, usually between 15% to 20%. This premium is higher than the usual 10% in criminal cases; the reason given by bond companies is that the risk that immigrants will not show up to court is higher than in criminal cases. There may also be other processing fees. Some other bond companies require a non-refundable premium each year, usually 10%, until the case is closed. Since immigration proceedings can take years, immigrants and their families can end up paying thousands of dollars in fees alone.

The Religious Based Organization “Helping” Families Reunite:

But there is a new type of business that has emerged to service those who do not have property or other assets to use as collateral. The name is “Libre” by Nexus, a Virginia based company whose “GPS program” provides what they describe as a “critical service [that] guarantees the immigration bond, and uses the GPS to secure the bond” without requiring any collateral.

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Nexus runs several privately owned businesses offering financial help and legal support for immigrants detained nationwide. According to Nexus’s website, they have five offices in California, including one in San Francisco.

According to an article published in 2015, Nexus Services, which is the parent company of “Libre by Nexus”, was founded in 2008 as a non-profit that provided “GPS tracking ankle bracelets for criminal suspects” with the idea of reducing jail overcrowding. In 2013, it became a for-profit business, expanding to other areas, such as drug and alcohol treatment and monitoring programs, a property division that rents or sells homes and business spaces to their immigrant customers, and, more recently, Nexus Caridades, a non-profit providing free legal services to immigrants in detention and removal proceedings.

The GPS tracking program is the core of Nexus. But the fees and practices of this company have raised red flags and many are concerned about what they consider to be fraudulent practices by the company. Libre by Nexus’s website describes it not as a bail bond company, but as one that contracts with bail bond companies that actually post the immigration bond. Nexus claims to either pay the full amount of the bond to the bail bond company or place other property as collateral.

Nexus requires a “co-signer”, someone responsible for ensuring that the individual detained complies with ICE’s orders and shows up to court. This person does not have to be a Legal Permanent Resident or Citizen, which many immigrants may see as an advantage. It also requires two pictures, one of the individual detained and another of the place the individual will live once released, and a list of three references. Once the application has been approved, the families have to pay a one-time nonrefundable 20% premium, based upon the total amount of the bond, plus an $880 processing and installation fee for bonds over $5,000, also non-refundable. Nexus’s website claims that they do not keep any of that money, but one of Nexus’s agents told me that the 20% premium gets “divided”. She did not know how it gets divided, only that the fee was the equivalent of “interest” that the company keeps; it does not get paid to the actual bail bond company.

IMG_0965After the initial fee is paid then a GPS bracelet is placed on the immigrant as soon as he is released. After the first month, the families must pay a monthly non-refundable $420 rental fee for the GPS; the first month is “free”. The rental fee does not get applied to the bond amount. Once the individual is released there are two options, pay 80% of the bond at once and have the GPS removed, then pay the 20% remaining in monthly installments; or wear the GPS, pay the monthly rental fee, and anything additional gets applied to the bond balance. Once 80% of the bond has been paid, which could take several months or years, then the GPS will be removed and the immigrant will be responsible for monthly payments for the remaining 20%.

Another option is that once the immigrant gets released, but only after their release, they place a house or other property as collateral. The approval process takes one to three months, during which the GPS rental fee will continue to be paid. Regular bail bond companies accept collateral before paying the bond, but not Nexus.

So what is wrong with Libre by Nexus?

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Several clients of Nexus have come forward and complained about what they consider are the predatory practices of this company. Nexus responded by suing Byron Vazquez, Director of Casa de La Cultura de Guatemala, Los Angeles based non-profit.

In 2013, the office of the Commonwealth Attorney for the State of Virginia, (CWA) the Fairfax City Police Department, and ICE Homeland Security Investigation (HSI) – an agency in charge of criminal and civil investigations involving national security threats, identity fraud, benefit fraud, or commercial fraud – all began investigating the practices of Libre by Nexus. The investigation began after several attorneys complained about what they considered were Nexus’s fraudulent practices. But to this date no charges have been filed against Nexus or any of its agents. A few weeks ago, I was provided the opportunity to review hundreds of pages of documents obtained via the Freedom of Information Act which gave me a better insight into how Nexus operates, and, while I cannot share those documents at this moment, here is what I found.

Many clients of Nexus have come forward and complained about the company’s practices. Here is a list of some of these practices and the red flags they raise:

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Maria, a Guatemalan immigrant, shows the contract for her electronic monitor.  (Photo by Aurelia Ventura/La Opinion)
  1. Nexus’s contracts states that they agree “to track the defendant pursuant to the bond set in the client’s local case, which currently is docketed in the EOIR IMMIGRATION Court” (See page 5). However, if a judge does not condition the bond on any kind of GPS monitoring, how can Nexus make the claim they are monitoring pursuant to conditions set by the Court?
  2. While Nexus does not make this express claim in writing, its agents have visited prospective clients in detention and have told them that they need, or that ICE or the immigration judge requires them, to contract with Nexus in order to “get out”. But ICE claims, and Nexus acknowledges in writing, that they are not affiliated with ICE or any other government agency and that they do not make release decisions (Page 5). However, there is a certain element of coercion when ordained ministers, employed by Nexus, visit desperate detainees and tell them that their only hope at getting out is Nexus.
  3. Attorneys have reported that judges have required their clients to comply with Nexus’s Programs. In at least one case, an immigration judge in Arlington conditioned, in writing, that a detainee be released on a $20,000 bond and comply with the Nexus program. As I wrote in my last post, judges have great discretion, but they also have the duty to be “Impartial” –“An Immigration Judge shall act impartially and shall not give preferential treatment to any organization or individual when adjudicating the merits of a particular case.” (5 C.F.R. § 2635.101(b)(8)). To be clear, immigration judges can set a condition that a detainee wear a GPS device in order to be released, or set other “terms of release” (8 C.F.R. § 1236.1(d)(1)), but they have to do it through a government sponsor program. For instance, GEO’s Intensive Supervision Appearance Program (ISAP) is an alternative to detention program that provides GPS monitoring for the Department of Homeland Security. Nexus, as far as I can tell, does not have a contract with ICE the same way the GEO group does. While judges may not be violating the law, at the very least one can argue that they are abusing their discretion by failing to remain impartial and ordering compliance with a non-governmental program. See 5 C.F.R. § 2635.101(b)(8).
  4. When clients have complained about the GPS or the fees, Nexus agents have told them that if they remove the GPS then the judge will revoke the bond. Now, this is not correct, at least not in theory. If the judge does not release an individual on the condition that he wears a Nexus GPS (which the judge should not do; see (5 F.R. § 2635.101(b)(8)) then neither the judge nor ICE should be able to revoke the bond. However, Nexus can ask the bail bond company to contact ICE’s Enforcement and Removal Operations (ERO) and ask them to take the immigrant back for not complying with the bond requirements. Most officers comply with these requests. A bail bond company can always revoke bail and ICE can take the immigrant back into custody. But in this case, the immigrant contracts directly with Nexus and not with a bail bond company. However, Nexus has found a way to use ICE to essentially “enforce” their contract by having the bond company make the request with ERO. It is not clear what the bail bond companies get out of this or what the actual financial arrangement is between them and Nexus. Even if this is not illegal, it raises a lot of concerns and leaves a lot of room for abuse.
  5. Traditional Bail Bond Companies, such as Freedom Bail Bonds, have promoted Nexus as a program that can help get immigrants out of detention. In some cases, bail bond companies that work with Nexus have charged clients an initial 15% premium to post the bond and have then referred clients to Nexus to have a bracelet placed on them. This means that if an immigrant has an $18,000 bond, he will pay $2,250 to the bail bond company and $3,130 to Nexus. But this makes no sense. If an individual can contract with a bail bond company directly then it is likely because that person can provide collateral, so there is no need to secure the bond through a Nexus GPS. It is not clear whether bail bond companies receive any payment or commission from Nexus, but if they do then they have found a way to make even more money off unsuspecting and desperate clients.
  6. In certain cases, where clients were granted bond and were ordered to enroll in an Alternative to Detention (ATD) Program as a condition for release – meaning they had to wear a GPS device provided by BI Monitoring Operation (owned by the GEO Group) — they were told by Nexus that they also had to wear a second GPS provided by them. The issue is that they were never provided a GPS from Nexus, but they still had to pay $320 a month, after a $100 “discount” for already having an ISAP GPS. If Nexus’ claim that “ICE does not share supervision information with Nexus and Nexus does not share supervision information with ICE” is true, how could Nexus charge for monitoring that was only done by ICE if Nexus and ICE were in fact not sharing information? But more importantly, how is it that none of the agencies that “investigated” Nexus in 2013 brought charges against the company? Several incident reports were filed in Fairfax County alone, yet the Virginia Commonwealth Attorney refused to file charges unless the GPS devices were “not functioning”. But, in some cases this element couldn’t be established simply because these clients were never provided with a GPS device.
  7. Nexus charges an initial nonrefundable assessment fee, usually $600 (Page 5). The fee is waived upon release and credited to the first month lease and activation fee, so when Nexus says that the first month is ‘free’ it really isn’t. If the detainee is not released, then Nexus makes their “report(s)” available for presentation at Immigration Bond hearings. In other words, they act as a private pre-trial services type of agency, draft a report and hand it over to the immigrant’s family, who many times are convinced this report will help secure the release of their loved one. But Nexus does not play a role in release determinations, as far as I can tell, and I could not find a copy of the type of report Nexus provides the families or the court.
  8. Nexus has encouraged clients to fire their attorneys and hire Nexus recommended attorneys. The company recently expanded Nexus Caridades, a non-profit providing free legal services for those who qualify. While not illegal, this raises even more red flags. One can see how this may create conflicts of interest. Clients of Nexus have complained about the payments, the bracelet, and the service to their attorneys, and in some cases attorneys have removed the GPS devices and marched into Nexus’s office to return the device and inform them that the client will no longer make the payments. I could not find any evidence that Nexus has retaliated against those who are represented by private counsel. But what happens if the client is represented by one of Nexus’s attorneys? Would they do the same? Would they contact the attorney general when their clients are paying for a device they never received? I think the answer is obvious.
  9. If an immigrant gets released and decides to post a house as collateral, they must provide Nexus with a copy of the deed, the mortgage and an appraisal. During the period the proceedings last, the house “belongs” to Nexus. If anything happens and the immigrant who was bonded out by Nexus fails to show up to court, Nexus will not enforce a lien on the house for the bond amount alone, as most bond companies would. Instead Nexus takes the whole house, as explained by one of its agents. When I tried to clarify this point, and reminded her that I was inquiring about a $15,000 bond, I was told this was correct, they take the whole house as compensation for the “risk” they were undertaking and because they have to pay the full amount of the bond to the bond company.

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So what can we do?

Under Virginia law, the Commonwealth Attorney General did not think that any of what I just described constituted fraud. However under California law, “actual fraud” consists of “the suggestion, as a fact, of that which is not true, by one who does not believe it to be true [and] a promise made without any intention of performing it” and “undue influence” is described as “suggestion, as a fact, of that which is not true, by one who does not believe it to be true,” (§§ 1172, 1175). So take for instance, telling a desperate detainee or his family that unless they contract with Nexus their loved one will stay in detention—this is not true and Nexus knows that; or telling them that not complying with Nexus will cause the judge to revoke the bond.

But some will say, “the client should’ve just read the contract”. The contract is in English, but a lot of people who contract with Nexus are recently arrived immigrants who do not speak English. Under California Law, as amended in 2014, Cal. Civ. Code §1812.623(a) seems to apply to the kind of GPS tracking devices used by Nexus, or at least one can argue it should. If that is so, then Nexus, when doing business in California, must provide a written agreement “in the same language as principally used in any oral sales presentation or negotiations leading to the execution of the agreement.” The languages include, because of the demographics in California, Spanish, Chinese, Tagalog, Vietnamese, and Korean. The copies of Nexus contracts I was able to obtain include one single page in Spanish, out of thirty-three pages (Page 6). The quality of translation is terrible to say the least; it looks as if someone used Google translate to try to translate the English version. I am a fluent Spanish speaker and I could not decipher half of what was written in the “Spanish” version. Under California law, a consumer is entitled to remedies, including actual damages; consumer’s reasonable attorney’s fees and court costs; and exemplary damages, in the amount the court deems proper. Cal. Civ. Code §1812.636(a)

If Nexus isn’t committing fraud, they are definitely walking a very thin line. I would be surprised if they could sustain these practices, although the reality is that Nexus found the perfect community to defraud. A lot of immigrants are afraid to come forward, and even when they do, no one seems to do anything, at least not in Virginia.

 

 

 

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It’s Hard to Understand When You Don’t Speak English

A common thread running throughout my and my colleagues’ research this semester is that issues surrounding bail are confusing and often unclear. There have been numerous times when my classmates and I have asked each other what something meant before we could move any further in our research.

I found this was the case in my research and analysis of bail contracts. I’ve taken a yearlong course in contracts and I had trouble defining some of the terms in the contracts, so I can only imagine what it is like for individuals who have no idea what legal terms in the contracts mean. One area that I haven’t addressed is what happens when the defendant does not speak English. Are the contracts translated into the language the individual speaks? Are they translated correctly? Do bail companies have employees who speak languages other than English? It is important to find the answers to these questions because in California, Civil Code Section 1632 requires that when doing business with an individual who doesn’t speak English, the contract has to be in the language that the individual speaks. The entire contract, as well as individual terms, must be translated correctly. I will look at how bail contracts comply with this law later in this post.

In Santa Clara County there are many individuals who don’t speak English who move through the criminal justice system. I was unable to find a statistic stating how many individuals in the Santa Clara County jail do not speak English, but I have interned at the Santa Clara County Public Defender’s Office and have worked with clients who don’t speak English. Spanish and Vietnamese are common languages in this county. If a criminal defendant does not speak English, an interpreter is provided to him when he appears in court. The county provides this service. But what about the defendants who are trying to bail out of jail? Most bail agents don’t take the time to explain every term of the contract when first obtaining a defendant’s business. It’s usually a quick conversation about the 10% payment and agreement for the defendant to sign the contract once he or she gets out of jail. One can assume it’s even less when the defendant doesn’t speak English.

California Civil Code Section 1632, “Translation of contracts negotiated in language other than English; necessity; exceptions,” is the applicable law for these issues. Subsection (b) states:

Any person engaged in a trade or business who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally or in writing, in the course of entering into any of the following, shall deliver to the other party to the contract or agreement and prior to the execution thereof, a translation of the contract or agreement in the language in which the contract or agreement was negotiated, that includes a translation of every term and condition in that contract or agreement.

This statute was enacted to increase consumer information and protections for the state’s sizeable and growing ESL population. ESL stands for English as a second language. When the statute first passed, it was directed at protecting the Spanish-speaking population in California, but has since been amended to include other languages.

For instance, a Spanish-speaking defendant calls a bail bond company to try and bail out of jail. The defendant does not speak any English so he and the bail bondsman converse in Spanish. Under section 1632, the contract that defendant eventually signs must be translated into Spanish. The contract terms I analyzed in my first post would also have to be correctly translated into Spanish.

What happens if a bail bondsman violates section 1632? Subsection (k) states, “Upon failure to comply with the provisions of this section, the person aggrieved may rescind the contract or agreement,” and “the consumer shall make restitution to and have restitution made by the person with whom he or she made the contract.” In Vargas v. Wells Fargo Bank, N.A. (2013 WL 117591), the court found that rescission is the only remedy under this section. There was a proposed bill in 2007 that would allow for actual and civil damages as a remedy in addition to rescission, but that bill did not pass. It is unclear how rescission would work with a bail contract, as I was unable to find any caselaw that could give some guidance.

I was able to obtain a bail contract in Spanish from Bail Hotline Bail Bonds, a bail bonds company here in Santa Clara County. My colleague, Carlos Barba, who is fluent in both languages, looked at the Spanish and English contracts to see if the Spanish contract had been translated correctly. Aside from a few spelling errors on the Spanish contract, it had been translated correctly. This was encouraging to see that at least on paper, this bail company was not trying to mislead Spanish-speaking defendants.

I am not sure if any of the bail companies are aware of Civil Code Section 1632, but I discovered the following facts about how different bail companies in Santa Clara County handle clients who don’t speak English.

At Bad Boys Bail Bonds, they have individuals in the office who speak Spanish and translators they can reach out to when necessary. However, they do not offer contracts in Spanish, which is in direct violation of section 1632. My hope is that they negotiate with the defendant in Spanish and then translate the contract orally, but I do not know if that is the case. Even if they do, this is not what section 1632 requires. At Bail Hotline Bail Bonds, they have people in the office who speak Spanish and also have contracts available in Spanish, as I mentioned above. At All Pro Bail Bonds, they have translators available at other office locations who can be called to help assist in speaking with clients. I was not able to find out if they provided contracts in Spanish.

After looking extensively at bail contracts in my series of posts, I believe that defendants are routinely misled by bail bondsmen, at a time when they are in desperate circumstances. Currently, there are advertisements posted in the “tank” at the Santa Clara County Main Jail for all the possible bail bonds companies a defendant can call to bail out of jail. It is unrealistic to think that during that initial phone conversation, a bail bondsman is explaining every term in the contract that the defendant is agreeing to.

Over the course of this semester, a recurring theme I touched on in my previous posts is that defendants are at their most vulnerable point when they are arrested and thrown in jail. It is at that point that they are desperate to get out of jail. Bail bonds companies are aware of this and use it to their advantage. There seems to be zero accountability for bail bondsmen who cut corners and don’t explain to defendants what they are agreeing to in a contract. All the power is in the hands of bail bondsman and that is something I would like to see change.

Feeling misled? How to fight back legally

You were in jail and desperately wanted to get out. You got in contact with a bail bondsman who agreed to pay your full bail amount if you paid him 10% of the bail. This is probably what you expected. What you most likely didn’t expect were the additional terms detailing expenses that you might have to pay now, because the bail bondsman didn’t mention them.

Is there any legal remedy available for a defendant who believes they were misled or “duped” by a bail bondsman? The answer: maybe. I have looked extensively at the text of those contracts and the legal support for them in my previous posts. A common theme I have found through my research is that bail bonds agents seem to hold all the power in the transaction, and it is likely that defendants really don’t know what they are getting themselves into. This post is going to look at whether defendants can bring a claim against a bail agent who has violated California’s consumer protection laws. I was unable to find any caselaw in California where this happened. However, as I expanded my research outside of California, I was able to find a state where a claim was allowed under that state’s consumer protection statute.

First, let’s take a look at the law in California. California’s Unfair Competition Law (UCL) (Business and Professions Code Section 17200) states, “unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” To bring a UCL claim, a plaintiff must show either an (1) unlawful, unfair, or fraudulent business act or practice, or (2) unfair, deceptive, untrue or misleading advertising.

Further, to state a claim under the UCL prong based on false advertising or promotional practices, it is necessary only to show that members of the public are likely to be deceived: actual deception is not required. My colleague, Shauna Lord, spoke with some bail agents here in Santa Clara County who told her that for the most part, the initial conversation between a bail bondsman and a defendant in custody is fairly quick. They usually discuss how much the bail amount is and how the defendant must pay 10% of the total. All the other terms in the contracts I looked at are probably not referenced. When the defendant gets out of jail and goes to the bail agency to sign the contract, it is likely the first time he or she has read the contract in full and has realized what was agreed to. This type of practice seems to fall under the deceptive or misleading aspects of a UCL claim.

I spoke with Scott Maurer, who is a supervising attorney at the Santa Clara Law Katherine and George Alexander Community Law Center. The clinic focuses on helping low-income individuals with legal issues and his focus is on consumer law. Mr. Maurer confirmed what I had suspected in that he had not seen any cases where a consumer protection violation was asserted with respect to a bail bonds contract. But he also stated that didn’t necessarily mean a claim couldn’t be brought. Mr. Maurer told me that issues surrounding bail and involvement with bail bondsman are not the typical types of cases he sees at the clinic. However, he has been involved in sending demand letters to collection agencies who were using abusive tactics to collect on these alleged debts. Although that point is slightly off topic from bail contracts, it is again another indication of the power bail companies hold over the individuals they obtain business from.

As I stated above, I was able to find a case from New York where this issue was addressed. In McKinnon v. International Fid. Ins. Co. (182 Misc. 2d. 517 (1999)), a judge held that the plaintiff’s allegations established a prima facie case of deceptive business practices in violation of New York’s General Business Law Section 349 (New York’s consumer protection statute). Prima facie means upon initial examination of the facts, there is enough evidence to support a claim. Under New York law, in order to establish a consumer protection violation, the conduct must be consumer-oriented and have a broad impact on consumers at large. (McKinnon p. 521) Further, the prima facie case requires that the defendant is engaging in an act or practice that is deceptive or misleading in a material way and that the plaintiff has been injured because of it. (McKinnon p. 522) In this case, the plaintiff alleged that the bail bonds agents (defendants) routinely charged and received fees of at least 10-15% of the total bail amount despite the limits set forth in New York Insurance law, and also that the defendants improperly designated these fees as “expenses” so as to circumvent the limitations placed on premiums. Based on the facts of the case, the judge allowed the suit to move forward. I was unable to find how that case was resolved. There was not a trial court or appellate court decision, so my assumption is that the case settled. However, that doesn’t negate the fact that the case was allowed to proceed under a consumer protection violation.

While New York law governing the bail bonds industry is different from California law, finding that case showed me two things. First, unfair or misleading bail practices by bail bondsmen do not only happen in Santa Clara County, California. I don’t think I’m going out on a limb when I say that at least some bail bondsmen use deceptive practices in other counties in California and other states as well. Second, there are issues both in contractual terms and business practices that could be raised in a lawsuit. I’m not sure why there hasn’t been this type of lawsuit in California, but maybe people who have used a bail bondsman don’t think there is any legal protection for them. Hopefully this issue will be more fully explored by an attorney who is well versed in consumer protection law.

My last post will look at one final issue surrounding bail contracts, analyzing how bail contracts are used for non-English speaking individuals, then wrapping up what I have learned through my research this semester.

 

Are Bail Companies Following the Law?

Have you ever wondered if the contract you are signing is legal? Maybe not, as many people assume the contracts they sign comply with the necessary laws, regulations, and rules. Although bail companies don’t have the most honorable reputation, this post will show that they are complying with the applicable laws. In California, bail bond companies are regulated by the California Code of Regulations. 10 CCR § 2081 delineates the collection and charges permitted; § 2082 outlines the prohibited service charges; and § 2083 looks at the specific written statements of bail transactions, including the contents and delivery. This post will first examine these regulations and then show how the contract terms I discussed in my last post comply with them.

Are there any limits to what a bail bondsman can charge a defendant beyond the initial 10% of bail? The short answer? Not really. The regulations place limits on bail bonds companies in that they can only charge defendants additional expenses that are “actual, necessary, and reasonable.” But only a few examples of those expenses are written into the regulation. With such broad terms in the regulations, my assumption is that bail bonds companies charge defendants a number of expenses that they claim are actual, necessary, and reasonable. I was unable to find any caselaw in California where defendants who had entered into contracts with the bail bonds companies have challenged the regulations, or more specifically challenged an expense to not be “actual, necessary, and reasonable”. The only additional limitation is found in CCR § 2083, which I will discuss below.

Permitted Collection and Charges:

CCR § 2081 focuses on the expenses that are associated with the bail transaction. It states, “No bail licensee shall, in any bail transaction or in connection therewith, directly or indirectly, charge or collect money or other valuable consideration from any person except for the following purposes.” Those purposes are summarized below.

Section (a) states:

To pay the premium at the rates established by the insurer and set forth on the undertaking of bail or to pay the charges for the bail bond filed in connection with such transaction at the rates filed in accordance with section 2094.

This section encompasses the right of the bail company to collect money for the initial bail transaction.

Section (b) states, “To provide collateral.” The regulation does not expand on this section, but some of the costs associated with collateral are noted in subsection (c).

Section (c) states:

To reimburse himself for actual, necessary and reasonable expenses incurred in connection with the individual bail transaction, including but not limited to:

                  (1) Guard fees after the first 12 hours following release of an arrestee on bail, and

                 (2) Notary fees, recording fees, necessary long distance telephone expenses; telegram                             charges, travel expenses; and a reasonable posting fee charged by a licensee operating in                    a county other than that where the bail was arranged;

For example, if the defendant chooses to put his house up as collateral for the amount he owes the bail agent, the bail agent can charge the defendant expenses associated with that collateral. For instance, suppose you were arrested in Santa Clara County, but the house you want to use as collateral is located in Riverside County. If the bail agent decides to travel to Riverside County to view the home or gather information about the house from the county’s assessor’s office, those travel expenses can be charged to the defendant. The only limitation on those travel charges is that they cannot exceed the amount allowed to be taken as a travel expense for income tax purposes under the federal Internal Revenue Code and Regulations, or the amount allowed by California to be claimed for mileage by its employees.

Bail bond agencies are allowed to reimburse themselves for these “reasonable and necessary expenses” as per section (d). This subsection does not give any examples of expenses that could be charged. Thus, it is completely left up to the bail company to use this broad discretion and determine what expenses to charge the arrestee after a breach of the agreement. The only limitation on bail licensee in this subsection is that the reimbursement may not exceed the penal amount of such undertaking or bond.

Finally, section (e) looks at the repercussions of a forfeiture of bail. If there is a forfeiture of bail, not only is the defendant on the hook for the forfeiture amount, but also is responsible for any of the actual, necessary, and reasonable expenses I discussed above. This could include the costs the bail agent may have incurred in tracking down the defendant, possibly even the cost of a bounty hunter the bail agent hired to find the defendant. This is explicitly stated in the regulation and again the balance is clearly in favor of bail companies administering these contracts.

Without any caselaw to further explain the parameters of this regulation, my assumption is that bail companies take advantage of their position and charge defendants expenses they consider to be legal.

Let’s look at some common terms found in these contracts:

To pay ‘stated amount’ per annum for this Bail Bond. The fact that Defendant may have been improperly arrested, his bail reduced, or his case dismissed, shall not obligate the return of any portion of said premium. This bond is renewable each year. First Party agrees to pay to Second Party a renewal premium in the amount stated above, twelve months after the date on which this Bond was executed. If said renewal premium is not paid upon written demand, second party has the right to surrender Principal, as provided in the CA Penal Code §1300.

This term is in direct compliance with §2081(a), as it describes the basic agreement of the amount to be paid between the bail bond company and the defendant.

To reimburse Second Party and Surety for actual expenses incurred by Second Party or Surety in connection with the arranging and/or execution of Bail Bond or renewal or substitution thereof whether or not said Principal refuses to be released after arrangements have been initiated by Second Party.

This term follows the provisions of § 2081(c), and specifically falls under the umbrella phrasing of “actual, necessary, and reasonable expenses” incurred in connection with the individual bail transaction.

To pay second party or surety as collateral upon demand, the penal amount of Bail Bond whenever Second Party or Surety, as a result of information concealed or misrepresented by the First Party or Principal or other reasonable cause, any one of which was material to hazard assumed, deems payment necessary to protect the Second Party.

Regulation of this term also falls under the umbrella in subsection (c). This nondisclosure/misrepresentation term is legal under this regulation because it is invoked when the bail bondsman believes he is at risk because of something the defendant withheld. It most likely will be considered an “actual, necessary, and reasonable” expense in connection with the individual bail transaction.

Prohibited Service Charges:

10 CCR § 2082 states:

Except to the extent permitted by Section 2081 (c), (d), and (e), no bail licensee shall make any charge for his services in a bail transaction in addition to the premium on an undertaking of bail or the charge for a bail bond at the rates filed in accordance with Section 2094.

This regulation seems to be referring us back to § 2081 for guidance, but without further explanation of these regulations, there is not much to go on.

Written Statements of Bail Transactions:

Lastly, 10 CCR § 2083 outlines specifically what the bail bondsman is required to give to the defendant, shortly after entering into the transaction. This regulation states,

Every bail licensee shall, at the time of obtaining the release of an arrestee on bail or immediately thereafter, deliver to such arrestee or, if the negotiations concerning the bail were not with the arrestee, to the principal person with whom such negotiations were had, a numbered document containing the following information:

  • If an undertaking of bail, the name of the surety insurer.
  • The name and address of the bail licensee
  • The name of the arrestee
  • The date of release of the arrestee
  • The date, time, and place of the arrestee’s required appearance.
  • The amount of bail
  • The offenses with which the arrestee is charged
  • The premium if an undertaking of bail, or the charge if a bail bond
  • An itemization of all actual expenses described in Section 2081 (c) and (d), supported by vouchers and receipts, or true copies thereof.
  • The total amount of all charges
  • The amount received on account
  • The unpaid balance, if any
  • A description of and receipt for any collateral received and a statement of any conditions relating thereto including a copy of any written agreement executed in connection therewith.

The bail bondsman is required to provide a document with each item listed above to either the arrestee, or the individual who secured bail for the arrestee. Most of the items are written right on the contract, but a key term is “the total amount of all charges.” When I first read § 2081, I saw the broad, umbrella-like terms that a bail agent could fit almost any type of expense under and then charge the defendant. It seemed that there were no checks on a bail agent. This subsection provides a slight check on the bail agent by requiring him or her to provide an itemization of the expenses mentioned above, and it must be supported with vouchers and receipts. While this doesn’t prevent a bail agent from classifying certain expenses as “actual, necessary, and reasonable,” it does require them to show proof, which ultimately is better than nothing.

10 CCR § 2083 is the only additional limit that is placed on bail bonds companies and what they can charge as an expense to defendants. Beyond this limitation, if the bail bonds company can show that an expense is “actual, necessary, and reasonable,” then they are in compliance with the regulations.

After analyzing these regulations, I have concluded that the bail companies are complying with the regulations set forth, at least in terms of what is put in the contracts. I was unable to find anything to show how these regulations are used in practice, so I analyzed them based on the exact language of the regulations. The regulations are phrased in a way to give bail agents extremely broad discretion in the expenses they can charge the defendant, who is bound to comply with the contract or risk being returned to custody. It seems quite unfair, but the bail companies will tell you that it is legal. My next post will look at any consumer protection laws that are in place in California to protect defendants from these unreasonable, yet legal charges, and also what, if any, states have taken certain measures to protect these individuals.

Taking a Closer Look at Bail Contracts

Picture this: You just got arrested. You’re in jail, most likely scared and have no idea what is going to happen. Within a few days, you go to court for your arraignment. Since you can’t afford an attorney, a public defender is there to represent you. Your case gets called and you go before the judge. After a quick five minutes of legal talk that you don’t quite understand, the judge sets your bail at $15,000. Both you and your family don’t have that kind of money, so your next option is to find a bail bondsman to post your bail for you. At this point, you just want to get out of jail. You call a bail agent who tells you that if you come up with 10% of your bail amount, $1,500, he’ll put up the rest. You can come up with $1,500, so you agree. The bail bondsman tells you that you must come down and sign the contract within 2 days of being released. You agree immediately because you’re getting out of jail. Chances are you aren’t thinking, “What did I just agree to?”

This post is going to look at exactly what the person in the above hypothetical agreed to in order to gain his or her freedom. My next post will look at the legal grounds and implications of this contract, including whether the following contract terms are enforceable and if any consumer protection laws exist to protect defendants in these contracts. In my research, I was able to look at three standard bail contracts from different bail agencies, including Bad Boys Bail Bonds, Bail Hotline, and Vu Bail Bonds whose contract can be found here. For the most part they all had the same terms in the contract, with a few deviations, but I will discuss the terms common to all three.

First, the bail contracts contain certain words or phrases that I will define: “First party” refers to the person paying the bond: it could be the defendant or someone who is willing to be a co-signor and is bound to the same contract. “Second party” is the bail bond company, and the “principal” is the defendant. A “surety” is the insurance company that is backing the bail bond company. My colleague, Ruby Renteria, defined “bond” as “a formal written agreement in which a person undertakes an obligation(s).” “Collateral,” usually consisting of property, such as real estate or cars, can be required by the bail company. The bail agent can take possession of the property if payments aren’t made.

In the standard bail contract, most people agree to pay a non-refundable “stated amount”, which is 10% of the bail amount that the judge set. In our hypothetical, this would be the $1,500 mentioned above. This term is usually the first term both parties agree to. The sample contract from Vu Bail Bonds uses this language:

To pay ‘stated amount’ per annum for this Bail Bond. The fact that Defendant may have been improperly arrested, his bail reduced, or his case dismissed, shall not obligate the return of any portion of said premium.

This part of the contract probably doesn’t surprise you; it is what the parties agreed to, and it explicitly states that the money is non-refundable. However, the word “annum” should be surprising. The contract explains this term in the next line,

This bond is renewable each year. First Party agrees to pay to Second Party a renewal premium in the amount stated above, twelve months after the date on which this Bond was executed. If said renewal premium is not paid upon written demand, second party has the right to surrender Principal, as provided in the CA Penal Code §1300.

This means that if you paid 10% to get out of jail, and your case gets continued in court, as it usually is, a year later you are required to pay another 10% of your bail. The way our court system works today, it is not uncommon for cases to take more than one year to get resolved, so even though you aren’t even in jail anymore, you still have to pay another 10% of your bail or else you will be returned to custody.

The hidden expenses in a bail contract continue on from there. The second term of a standard bail agreement states,

To reimburse Second Party and Surety for actual expenses incurred by Second Party or Surety in connection with the arranging and/or execution of Bail Bond or renewal or substitution thereof whether or not said Principal refuses to be released after arrangements have been initiated by Second Party.

In simpler terms, you are essentially agreeing to pay the Bail Bond company costs associated with them securing your bail. Further, after the company has started the process of obtaining your release and you decide for whatever reason you don’t want to be released, you’re on the hook for those costs as well.

What if in the midst of trying to secure your bail, you left out pertinent information or misrepresented some information about yourself in your initial conversation with the bail bondsman? Well, there are contract terms that cover this scenario as well. If the bail bondsman feels it is necessary, he can come after you for the full amount of your bail. In the middle of our sample bail contract, the fifth term states,

To pay second party or surety as collateral upon demand, the penal amount of Bail Bond whenever Second Party or Surety, as a result of information concealed or misrepresented by the First Party or Principal or other reasonable cause, any one of which was material to hazard assumed, deems payment necessary to protect the Second Party.

A quick definition may help: “penal amount” is money bail the judge set for the defendant to pay to obtain his release. In our hypothetical, the penal amount is $15,000. The enforcement of the nondisclosure/misrepresentation term is completely up to the discretion of the bail bondsman, subject to state regulations, and the defendant is at the mercy of the bondsman to not invoke this term.

Finally, after the hidden fees and costs that you most likely weren’t aware of when making the agreement with the bail bondsman, the last term of a bail contract states,

The surety or its representatives shall have the right to examine the credit history, department of motor vehicle records, employment history, books and records of the undersigned, or assets covered by the bond, or the assets pledged as collateral for the bond.

Agreeing to this term means you are handing over access to private information about yourself, and the reality is, you’re agreeing to this so you can gain your freedom. Even more troubling is the reasoning why the bail bondsman wants this information. They require this private information so they are able to track you down if that becomes necessary. What is ironic about this situation is that to gain your freedom, you’re actually sacrificing a whole lot more than you first expected in order to gain that freedom, including your privacy and the privacy of your loved ones. While this sacrifice is troubling, your freedom is worth it.

In my next post, I will be looking at the legal implications of these terms, including if they comply with state law and whether there are any consumer protection laws to protect the defendants.

 

 

Terms of the Agreement: Looking at Contracts between Bail Agents and the Defendant

My topic for the semester is going to focus on the bail bond agencies, specifically the contracts between a bail agent and the defendant. I am going to be looking at contract formation between these two parties. Some of the questions I would like to answer in my research include: what each side is agreeing to, how often a contract is actually signed, what are the minimum requirements a defendant needs to meet in order to be granted a contract, etc. Another issue under bail contracts I will be looking into is what, if anything, happens if there is a breach of this contract? Is bail forfeited? Are the defendants still liable to pay if bail is exonerated? Do bail agents “double-dip?” In other words, do they go after the defendants for money more than once? If the contract between the defendant and the bail bondsman is a civil contract, then why is the remedy for breach of contract a criminal penalty, being put back into custody? Ultimately I hope to answer these questions and more, while increasing my understanding about the private bail bonds agencies in California.

My name is Zina Zaia and I am currently in my second year of law school at Santa Clara University. Since I have been in law school, my internships and class electives have centered on criminal law, specifically criminal defense and helping the indigent defendant. My research and writing for this policy class on bail will be a continuation of that trend. My hope in researching my topic is to gain a better understanding of a large part of the criminal justice system that disproportionately affects the indigent defendant.