Fact Sheet: Profit Over People: Inside the Commercial Bail Bond Industry Fueling America’s Cash Bail Systems

Rife with unethical and harmful practices, the commercial bail industry maximizes profits at the expense of safety and justice. After an individual is arrested, the court assigns conditions intended to ensure that they return for their court dates and remain arrest-free. Too often, those conditions include the assignment of cash bail—money an individual must pay to secure their release pretrial. Today, an individual’s ability to afford the cost of bail is the single most important factor in determining if a person is released to the community pretrial or if they await their trial from a jail cell.¹

When someone is assigned cash bail, they are given three options to avoid pretrial incarceration: Use their own money to pay bail, use a commercial bail company to secure release, or remain in jail. Using a commercial bail company and remaining incarcerated pretrial can result in lifelong consequences for arrested individuals, their families, and their communities. Reliance on cash bail results in racially and economically unjust outcomes, high rates of pretrial incarceration, increased costs to taxpayers, and negative public safety consequences.

Current cash bail practices ignore the fact that most people who are arrested are safe to be in the community pretrial.⁵ Systems that rely on cash bail produce high rates of unnecessary pretrial incarceration,⁶ which is known to increase recidivism.⁷ One study found that assigning cash bail was associated with a 6 percent to 9 percent increase in the rate of recidivism.⁸ The commercial bail industry further jeopardizes public safety by prioritizing its own profit potential in decision-making, relying on abusive contract terms, and using violent practices to return people to custody and collect payment.

Commercial bail: The for-profit industry behind failing cash bail systems

As one of only two countries in the world that allow commercial bail bonds, the United States allows corporate interests to profit from people who are legally innocent and at risk of being incarcerated pretrial.⁹ Clients (individuals arrested and charged with a crime) work directly with commercial bail agents, who are responsible for initiating the contractual relationship between the client and the bail company and enforcing bail contracts. In exchange for a nonrefundable premium—a fee typically equal to 10 percent to 15 percent of a cash bail assignment¹⁰—a commercial bail agent enters into an agreement with the court to pay an individual’s full cash bail amounts if they fail to appear for their required court dates.¹¹ Today, there are around 15,000 bail bond agents¹² in the United States who are responsible for bailing out more than 2 million people each year.¹³ At times, commercial bail agents hire bounty hunters to find and return to custody clients who miss their court dates. Bounty hunters are also employed to harass clients in efforts to collect overdue payments.

Figure 1

Backing most commercial bail bonds is a small network of insurers. In 2021, there were just six large insurance corporations that underwrote 76 percent of bail bonds written that year:¹⁴ Fairfax Financial Holdings Limited; Bankers Financial Corp.; Allegheny Casualty, International Fidelity and Associated Bond; Financial Casualty & Surety Inc.; Lexington National Insurance Corp.; and American Surety Co.¹⁵ In 2019, an estimated $15 billion in bail bonds was written.¹⁶ The exact profit of the commercial bail industry is difficult to calculate,¹⁷ but the industry has been estimated to collect as much as $2.4 billion in profit each year.¹⁸

The commercial bail industry prioritizes profit over people

• Commercial bail companies select clients based on their potential for profit rather than concern for community safety. Bail agents have complete discretion over who they contract with and tend to make their decisions based on one factor: the ability to make a profit. Since many agents see small bonds as “risky and unprofitable,”¹⁹ many people with low cash bail amounts who are otherwise safe to be in the community remain incarcerated simply because they cannot afford to pay for their release.

• Commercial bail companies lack any incentive to ensure that individuals remain crime-free and bear no responsibility if a client commits another crime. In fact, it can be profitable for bail agents if the people they bail out are rearrested. If rearrested, the individual will either be returned to jail—in which case the bail agent retains the 10 percent premium and is relieved of their responsibility of ensuring the individual returns to court²⁰—or the client’s cash bail amount, as well as the agent’s premium fee, will likely increase.²¹

• The commercial bail industry traps people in predatory contracts. Bail agents take advantage of vulnerable clients, trapping them in predatory contracts with conditions that “violate common notions of fairness and justice.”²² In addition, innocent co-signers to these contracts—who are predominantly low-income women of color²³—are forced to sign away their rights and incur debt to help buy their loved one’s freedom.²⁴ Because of the racial inequities in rates of cash bail assignment and cash bail amounts, people of color, particularly Black people, are more likely to need a commercial bail bond to afford release and are therefore more likely to be trapped in predatory bail contracts.²⁵

• The commercial bail industry relies on unreasonable fees. Commercial bail contract fees are sometimes so extensive that people end up paying more in fees than their total cash bail assignment. Fees may include recovery fees if a person fails to appear,²⁶ high interest rates on financed premiums, or attorney’s fees.²⁷

• Some commercial bail agents rely on violence to protect their bottom line. Many bail agents harass clients who miss payments and often hire bounty hunters to find clients who miss their court date.²⁸ Bounty hunters are notorious for employing violent practices that too often result in trauma, injury, and even death.²⁹

The commercial bail industry is predatory, unregulated, and expanding

Since the industry implemented a more formalized lobbying strategy in the 1990s, there has been a significant shift in favor of cash bail, expanding the use of commercial bail bonds across the country. In 1990, 23 percent of pretrial releases used a commercial bail bond, while 40 percent of people were released on recognizance.³⁰ In 2009, releases that used a commercial bail bond more than doubled to account for 49 percent of releases.³¹ The same year, only 23 percent of people were released on recognizance.³²

Figure 2

Legislatures, administrative agencies, and courts alike have failed to adequately regulate the commercial bail industry and protect people from its harms:

• State legislatures have passed legislation to favor the use of commercial bail bonds. From 2010 to 2013, Georgia, Louisiana, Mississippi, and New Jersey (prior to its 2017 bail reform) enacted laws to restrict the charges for which a judge can release an individual on their own recognizance, increasing the likelihood that individuals have a cash bail assignment and need to use a commercial bail bond to secure release.³³ Mississippi and Michigan enacted laws in 2007 and 2009, respectively, that allow courts to assign cash bail that can only be paid in the form of a commercial bond as a condition for early release.³⁴ Florida and Texas enacted laws that create onerous and redundant reporting requirements for pretrial services agencies that far exceed the requirements placed on commercial bail companies.³⁵ These laws serve to undermine the effectiveness of pretrial services agencies, which provide an alternative to commercial bail bonds.³⁶

• The regulatory scheme governing the industry fails to protect clients from industry abuses. There are four main failures with current regulatory structures governing commercial bail bonds. First, 10 states have no licensure requirements for bail agents, while the 37 states that do have only minimal requirements.³⁷ Only 22 states require bounty hunters to be licensed.³⁸ Second, most states have no or few training requirements for bail agents or bounty hunters, which allows people to enter the profession in a matter of days, in some cases.³⁹ Third, oversight of the commercial bail industry is ineffective.⁴⁰ Fourth, states fail to adequately enforce existing regulations against the industry.

• The commercial bail industry is insulated from many mechanisms of judicial accountability. Efforts to hold the industry accountable under criminal and civil law have been largely unsuccessful due to gaps or exceptions in the law.⁴¹ Systemic barriers such as lacking financial resources and the stigmatization of being justice-involved limit the ability of people harmed by the industry from initiating lawsuits against it.⁴² However, recent efforts to enforce consumer protection actions against the industry may signal a new avenue for accountability.⁴³

Recommendations for state-level improvements to cash bail

Abolishing the use of cash bail is the best means to eliminate the role money plays in determining access to fair and equitable pretrial justice and to restore the presumption of innocence in the U.S. criminal legal system. Illinois has provided a statewide model for other states to cease cash bail practices.⁴⁴ Short of ending cash bail altogether, there are several opportunities for states to better protect residents from the abuses of the commercial bail industry:

• Eliminate commercial bail: Some states have maintained cash bail practices but eliminated commercial bail companies from the process. Illinois, Wisconsin, and Kentucky banned the commercial bail industry through legislation, while Oregon⁴⁵ and Massachusetts⁴⁶ have effectively ended commercial bail practices through state court decisions. Many of these states rely on state-run, rather than commercial, bail systems.⁴⁷ Rather than paying a premium to a commercial bail company for posting cash bail, an individual pays a 10 percent deposit to the courts. While replacing a commercial bail system helps prevent industry abuses, racially and economically disparate outcomes are likely to persist in state-run cash bail systems.
• Establish pretrial services systems as an alternative to cash and commercial bail: Pretrial services agencies, currently operational in 300 jurisdictions across the country, provide many services to ensure court appearance, such as monitoring and supplemental resources, including transportation costs and court reminders.⁴⁸ Investing in pretrial services agencies would allow jurisdictions to lessen their reliance on cash and commercial bail while ensuring high court appearance rates and public safety.
• Invest in regulatory and enforcement mechanisms: Historically, state agencies with regulatory authority over the commercial bail industry have inadequately enforced claims against the industry. The failure to address abuses has allowed the industry to operate without fear of accountability. Providing increased funding to state government insurance departments and/or commissions for enforcement actions would promote compliance with state regulations and ensure that bad actors can be held accountable.
• Strengthen consumer protection laws: Current consumer protection laws guard against many of the types of abuses perpetuated by the commercial bail industry, but explicit exemptions and unclear statutory language often prevent these laws from applying to the industry.⁴⁹ State lawmakers can pass legislation to end explicit exemptions and/or clarify the inapplicability of insurance exemptions to the commercial bail industry where there is uncertainty.

Conclusion

Each year, more than 2 million people enter into contracts with commercial bail agents.⁵⁰ Due to inadequate oversight and regulation of the commercial bail industry, many of those individuals will be subjected to predatory contracts, violence, and other abusive and unethical practices. It is essential for policymakers to implement solutions that limit the role of money in pretrial release decision-making, rein in the commercial bail industry through oversight and regulation, and protect clients from industry abuses.