If you're thinking of investing in bail bonds, you probably have some questions. After all, the money you pay to a bondsman is not refundable. And even if the defendant shows up to their court dates, is found not guilty, or has the charges dropped within 48 hours, the money you paid will never be returned. And, unlike a bank or credit union, there is no regulation of the contracts that bail agents make with their clients. That means the California Department of Insurance receives calls from angry people who have lost collateral and are unhappy with their experience.
The average bail amount doubled from $25,400 in 2006 to $55,500 in 2010. This is a shocking increase in just over a decade, and you may be wondering if it's worth investing in bail bonds in the first place. Whether you choose to invest in bail bonds is a personal decision, but it is not a good idea to invest your money in them.
In the United States, the criminal justice system has several different bail systems. In most states, bail bonds are the process of posting money to secure a person's freedom. When someone is arrested, they can remain in jail until their trial, or they can arrange bail bonds and pay for the bail in full. Some courts accept collateral as payment in lieu of cash. Bail bondsmen, also called bail bond agents, are professionals who arrange the bail of defendants and provide a written agreement with the criminal court to guarantee their appearance in court.
Bail bonds are a way for the criminal justice system to make money when someone can't pay their bail. However, many people don't have the cash to pay for the bail amount in full, and in such cases, the bail bondsman steps in to help. Bail bondsmen are paid a fee for their services and will return the full amount of the bond if the defendant doesn't show up in court.
The bail industry is backed by insurance companies and other special interests. Multi-billion dollar insurance companies are lobbying the state to reduce the bail bond industry's financial risks. The industry's political influence allows it to maintain its hold over the pretrial process. They earn profits by taking money from low-income people and the community. And they have spent millions of dollars in lobbying California and have contributed over $3 million to state-level political candidates in the state.
First, you should know the legalities of bail. Bail bonds only provide money when the judge feels it's necessary. The defendant is presumed innocent until proven guilty and has not yet been released. Second, you should never assume that the person will always be released. There are many cases in which bail bonds were deemed unnecessary. In fact, the bail process is largely arbitrary. Moreover, the judges review the criminal records of every person who applies for bail.
The risk of failure is high. Bail bonds are risky businesses. Even when you have a steady income, you risk losing the money you post to cover the expenses of pursuing the defendant. Bail jumpers eat into your profits and a bondsman must invest a large amount of cash to be successful. It's also a highly competitive industry. You have to have a large amount of cash to pay off clients.
Second, commercial bail bond companies receive little oversight. In San Francisco, complaints against bail companies have increased more than 300% in the past five years, according to a former collection agent. Third, the commercial bail industry isn't regulated like other pretrial release programs. Bail companies can use whichever criteria they want without regard for the law. Furthermore, bail companies are not required to publish court appearance rates or rearrest rates.
The most common mistake people make is investing their money in bail bonds. The industry is unregulated and there are too many bad actors in the process. While the benefits of bail bonds are undeniable, the risks outweigh their benefits. In fact, bail bonds are one of the best investments available. With proper knowledge, you can invest your money in bail bonds and make a profit in the process.