Following 蜜桃传媒 complaint, Louisiana bail bond companies ordered to repay millions in excess fees to New Orleans residents
The Louisiana Department of Insurance this week ordered most New Orleans-based bail bond companies, along with their insurance underwriters, to repay nearly $6 million in illegal profits they took from as many as 50,000 low-income residents and their families.
Yesterday鈥檚 order follows a complaint聽the 蜜桃传媒 filed in September 2017 with the state insurance department, which regulates the bail bond industry. The 蜜桃传媒 filed its complaint after discovering that the companies routinely charged premiums to low-income defendants, and their families, that were more than the legal limit of 12 percent of the bond amount.
鈥淔or more than a decade, most New Orleans-based bail bond companies have thumbed their noses at state law and cheated tens of thousands of low-income people and their families out of millions of dollars,鈥� said Micah West, senior staff attorney for the 蜜桃传媒. 鈥淭his casual and routine thievery ends today thanks to the order by the Louisiana Department of Insurance, which found that these bail bond companies routinely overcharged defendants and which requires them to return their ill-gotten profits by no later than June 1, 2019.鈥�
The 蜜桃传媒鈥檚 complaint asked the Louisiana Department of Insurance to impose the maximum penalty for each violation and to suspend or revoke the operating licenses of any company found to have engaged in unfair or deceptive practices.聽
Yesterday鈥檚 directive from Louisiana Commissioner of Insurance James J. Donelon warns bail bond companies that they could be subject to the state鈥檚 criminal theft laws if they do not return the ill-gotten profits. It also warns the companies that they could be fined or have their bail bond licenses suspended.
The 蜜桃传媒 estimated that, on average, the companies overcharged defendants and their families $100 each to underwrite a bail bond. Collectively, the overcharges amount to about $6 million over nearly 14 years.
鈥淲e believe the commissioner鈥檚 directive demonstrates why money should not be a factor in determining who is detained or released pretrial, as it creates perverse incentives for bail bond companies hungry for profits to take advantage of the most vulnerable people in our communities,鈥� West said.
The commissioner鈥檚 order directed the companies to identify and refund the amount of the overcharges to everyone who was affected since 2005.
鈥淚t has come to my attention that many criminal bail bond producers and commercial sureties operating in Orleans Parish are charging thirteen (13%) percent premium. This is not permissible,鈥� Donelon wrote in his letter to all licensed bail bond producers and commercial sureties. 鈥淎ny criminal bail bond premium collected from consumers in Orleans Parish in excess of twelve (12%) percent of the liability written is in violation of the Louisiana Insurance Code. Any excess premium collected must be returned to the payer.鈥�
An 蜜桃传媒 investigation found that at least 21 bail bond companies in New Orleans, and the associated insurance companies, routinely charge a 13 percent premium to underwrite a bail bond.
The vast majority of defendants in Orleans Parish who are released from jail under financial conditions purchase bail bonds.
State laws allow bail bond companies to charge defendants a premium of up to 12 percent of the face value of the bond imposed by a judge, in exchange for a promise to pay the full amount to the court if the defendant doesn鈥檛 show up for trial.
