New Orleans Bail Bond Companies Overcharged Poor by Nearly $5 Million

by September 8, 2017

Several New Orleans-based bail bond companies, along with their insurance underwriters, have collectively overcharged poor defendants nearly $5 million over the last 12 years, in violation of state law, according to a complaint the SPLC filed today with the Louisiana Department of Insurance.

“These companies have flouted state law and cheated tens of thousands of poor people and their families out of millions of dollars,” said Micah West, staff attorney for the SPLC. “Such blatant financial abuse is particularly egregious when it’s being carried out as part of the justice system and under the nose of the courts.”

The SPLC is asking that bail bond companies and their underwriters stop charging excess fees and issue refunds to those who have paid them. The complaint also asks 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.

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’t show up for trial.

The SPLC’s investigation found that at least 21 bail bond companies in New Orleans, and the associated insurance companies, routinely charge 13 percent. The estimated cost in overcharges to felony defendants averages $100 per bail bond. Over the past 12 years, nearly 50,000 people in New Orleans were affected by the overcharges, according to SPLC estimates.

“The amount these companies overcharged their victims is staggering,” West said. “Many defendants could have used that money to pay for rent, utilities, child care or other basic necessities but instead were forced to pad these companies’ bottom lines.

“These companies’ actions demonstrate why a person’s liberty should not be subject to profit. As more and more jurisdictions are realizing, justice is not served by making people pay money for their physical liberty.”

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