CityViews: State Fails to Protect Consumers from the Bail-Bond Industry

I recently learned of City Comptroller Scott Stringer’s effort to eliminate the commercial bail-bond industry; I took a great interest in this issue, because I too have been a victim of the industry.

Many accused but not convicted persons spend many months on Rikers Island, just across the water from LaGuardia Airport, awaiting trial. But there is a way out of Rikers before you get to trial. And that is bail. Except the bail system is broken in so many ways that it functions only occasionally. The question “Why hasn’t someone fixed this?” comes to mind much too often. The reason is simple. If you cannot post bail, are denied bail, or bail is set so ridiculously high that you cannot afford bail, the system enjoys a much higher probability of the accused taking a plea bargain—even if it’s not really a bargain at all.

Bail should run very smoothly because it is regulated by the Department of Financial Services. DFS is an important place that regulates all sorts of financial licensing for entities such as banks and trust companies, insurance companies and all sorts of brokers, including bail bondsmen. There are regulations in place that permit bail bondsman to secure bail bonds for defendants, which are little more than an insurance policy that says the defendant will show up in court for trial or the court will be paid the amount of the bond. These same regulations limit what the bail bondsman can charge for a fee for their services and require the prompt return of the bail-bond deposit and collateral at the end of the criminal case if the bond is not used.

Unfortunately, I got taken by a person pretending to be a bail bondsman. It’s a story that starts out with feeling relieved to have found an advocate for a prisoner that I knew in Rikers who called me and asked me to help him and it ended with my discovery that this advocate was a Bounty Hunter and not a licensed bail bondsman. In between, he took the very large deposit on the very large bond that we attempted to post. And he kept it.

After the court demanded a cash bail—which meant that we did not need the insurance bond that I had secured—we cancelled the bond and asked for the deposit back. I was told twice that the deposit money was coming back to me imminently. But, it never showed up. Those funds disappearing really hurt, as they were going to be used to hire an attorney.

I called DFS, believing that they would come to our rescue. Only by being persistent was I finally told that they did not enforce these regulations. I had to go to the police. But that process was made harder because I couldn’t just go to the police near my home or in Manhattan I had to go to the bounty hunter’s home court. That place was all the way out in Patchogue, N.Y. in Suffolk County.

After a drive of two hours, I met up with an assistant district attorney and a police officer, both of whom were already involved in this case. Turns out, I was not the first person to complain. I was the sixth. When will he be arraigned, I asked? They were such nice people that they suppressed the laughter that was building up inside of them.

This is a civil matter, they told me. You have to go get a lawyer and sue this man for the return of your funds. Of course, retaining counsel and launching a civil law suit would eat up any hope I would have of seeing money back from this process. And it would not be quick.

“How could that be?” I said with all of the innocence of the patsy at the poker table. It was fraud, plain and simple. It turns out that he and many other bail bondsmen do this. And most get away with this theft.

If Stringer really wants to fix this, I have a simple, easy and low-cost solution. Make the illegal retention of bail bond premiums and the charging of illegal fees felonies as defined under Section 190.65, Scheme to Defraud. Currently DFS, and local law enforcement are doing nothing when bondsmen—or people pretending to be bondsmen—violate the law, and hurt consumers.

This will finally bring hope and justice to those of us who are trying to deal with a legal system that is clearly stacked against the citizen.

Mitchell Fillet, the author, is a Professor of Finance and Economics at Rutgers Business School.