October 28, 2021
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California laws protect co-signers of bail bonds

September 3, 2021

California Attorney General Rob Bonta and California Department of Insurance Commissioner Ricardo Lara filed an amicus brief in defense of the rights of Californians who co-sign premium financing agreements for bail services. These complex and unfamiliar agreements are often signed under tight time pressure and in situations fraught with emotion, making the co-signers particularly vulnerable to misunderstanding and deception as they try to secure the release of a friend or loved one from pretrial detention. While the state has comprehensive consumer protection laws to ensure Californians are not taken advantage of in cases like these, the bail bond industry has long operated as if these laws do not apply to them. In the brief, Attorney General Bonta and Commissioner Lara argue that a financing agreement between a bail agent and a consumer is an extension of consumer credit subject to California’s consumer credit laws – and the protections those laws afford. 

“For too long, the bail bond industry has profited off our broken criminal justice system at the expense of California consumers,” said Attorney General Bonta. “Ignoring consumer protection laws, bail bond agents take advantage of Californians when they are at their most vulnerable, locking people into confusing or exploitative bail premium financing terms that leave them on the hook for debt they cannot afford. The bail bond industry's long-running tradition of violating state consumer credit laws is no excuse. We urge the court to level the playing field and affirm that California's consumer credit laws do, in fact, apply to bail premium financing agreements.”

"The for-profit bail industry continues to take advantage of low-income Californians while ignoring consumer credit laws in place to protect them from abuse,” said Insurance Commissioner Lara. “By joining in this amicus brief with the Department of Justice, my department continues to regulate the bail industry and take action to stop deceptive practices that do nothing to advance public safety and protect consumers.” 

California's consumer credit laws were enacted to protect consumers from deception and exploitation in financial transactions and to address the unequal bargaining power and access to information that exists when a business makes a loan or extends credit to a consumer. Under these laws, creditors are required to provide co-signers with a plain language notice informing them of the financial obligation they are about to undertake. If a creditor fails to provide the required notice, the creditor cannot subsequently bring a collection action against the co-signer. 

In Bad Boys Bail Bonds v. Kiara Caldwell, the court will decide whether Bad Boys Bail Bonds violated consumer credit laws by failing to provide a plain language notice about potential personal liability to a woman who co-signed an agreement to finance a friend’s bail premium. In the amicus brief, Attorney General Bonta and Commissioner Lara argue that bail premium financing agreements are consumer credit contracts, and therefore subject to the Consumer Credit Contracts Law. This interpretation is consistent with the statute's intent and the law's broad protective purpose. Attorney General Bonta and Commissioner Lara also argue that bail agents’ licensure and regulation by the California Department of Insurance does not excuse agents from complying with other applicable state laws.