Understanding Risk Assessment in the Bail Bond Business
Based on the fact that posting bail comes in a variety of dollar amounts, and bail agents are exposing themselves to a possible forfeiture every time they write a bond, they must choose wisely when deciding to take on a new client. The potential risk here is that the defendant could be a flight risk and the bail agent would then be responsible for the entire amount of the bond, as well as the co-signer(s) for the defendant.
Risk Assessment 101: The following is a true story and a great example of using poor judgment that can cost a bail agent their business.
- Santa Barbara County, CA – 2010: This is a case where “fame and fortune” can turn into a true nightmare and assumptions can backfire. – Police arrested the famous actor, Randy Quaid and his wife Evi for “squatting”, or illegally staying in a house they once owned in Montecito, California insisting that they still owned the home and had a right to be there. They also ran up a bill of $100,000 in a San Yisidro hotel and took off without paying.
As it turned out, a local bail agent decided to take a risk on the couple who had bail set at $500,000 each, for a total of $1 million. At 10%, that’s a $100,000 fee to get them released from jail, which they had no problem paying. While this is a very attractive fee, there is still a great deal of risk that this couple, famous or not, could be flight risks and perhaps writing this bond should have been approached with greater caution.
Reality is that the Quaid’s skipped bail (didn’t show for their court dates more than once) and took asylum in Canada where Evi Quaid’s dad was born, so she was granted citizenship on those grounds. This is a very serious situation for the bail agent because he risks losing his business for the fame and fortune he sought when he helped get the Quaid’s released.
The bail agent had one year to get the Quaid’s back into custody, but it was and is impossible with them being protected by Canada, where they still remain today. The judge spent a long time deciding if he would hold the bail agent and his surety responsible for the full $1 million or not, but after several motions were presented by the bail agent to the court, the judge decided that the money collected from this bond would be best suited for Santa Barbara County and ordered the bail agent to pay.
This example is a reality check because this can happen from any one of the bonds a bail agent writes, large or small, which can and will have a direct impact on a bail bond business. This is why a bail agent MUST get collateral upfront to cover the full amount of the bond, which means the collateral must be worth more than the full amount of the bond, just to be on the safe side.
In short, here are two major steps that must be taken when assessing the potential risk of every bond written:
- Weigh the possibility that the defendant being released will leave town to avoid prosecution.
- Determine if the collateral provided will be enough to pay the full amount of the bond, if the defendant skips.
There are no rules of thumb or benchmarks to consult, but experience and instincts, along with the defendant’s past record and current lifestyle should give a bail agent a good picture into the character of this person. Here is a list of questions that address a defendant’s current lifestyle to be used with every potential client:
- Does defendant live in the area where they were arrested?
- Does defendant’s family live in the area as well?
- Is defendant employed? How long for the current company? How long in the same industry?
- Does defendant live in a house or apartment and for how long?
- What are defendant’s personal assets?
- What is the situation and the story behind the arrest?
These questions not only need to be answered by the defendant, but by the co-signer, as well, since they will be putting up the fee to post bail and guaranteeing that the defendant will show up in court as scheduled.
Smaller Bail Amounts…Mean Less Risk
In the case of a smaller bail amount, where the crime is of a minor nature (probably a misdemeanor), a bail agent will usually know if he wants to write the bond after just a few minutes of speaking with the caller. An example of this would be if a parent called about their son who was arrested for being drunk in public. The bail agent will know pretty quickly that this is a low risk bond and even if the defendant skipped bail, the parents will most likely be able to pay the bond in full.
It’s an instinct a bail agent develops with experiance over time.
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