Keep Bailing

In order to get released from jail, one would customarily use the services of a traditional bail bondsman or post the full cash bail with the jail.  At the Ventura County jail, which is just a few miles from my office, they have a new way to post bail.  It’s called credit card bail.

How Credit Card Bail Works

The Ventura jail phone has a toll free 800 phone number posted near the phone.  An inmate or family member can call this phone number to bail out of jail.   Here is how it works:  Let’s say you have a bail for $20,000.    This credit card bail system allows the inmate to have the full bail charged (plus a 7% processing fee for Ventura County) to a credit card.  For example, on a $20,000 bail bond, an inmate would be charged a total of $21,400 for release from jail.  Once the defendant has appeared in court, they would be refunded $20,000.  The net effect of this transaction is that the inmate would be charged 7% to be bailed out of jail.   Who gets to keep the 7%?  It seems that the county takes a cut and the “third party” unlicensed processing entity makes a nice profit.

Ventura County is not the only county in California that enables inmates to bail out using a credit card.  In fact, several states now utilize some form of this process.  Over the past several years, credit card bail seems to be spreading like wildfire.

Why is this bad for California?

1. No accountability.  What happens when the defendant “fails to appear” on a credit card bail?  What incentive does the County or State have to find the defendant?  None.  When a bail bondsman is utilized, the bondsman has the financial incentive to locate the defendant.  The bail agent is in a much better position to ensure justice and public safety. 
2. What happens when the cardholder decides to dispute the charges?  It’s not very difficult to dispute charges on a credit card.  Often, it only takes a phone call to the credit card company.  Now the County is saddled with a disputed credit card account as well as a potential fugitive.
3. It seems contrary to public policy and law.  For example, the California Department of Insurance (DOI) is the regulatory agency for bail bondsman.    In California, only licensed bondsmen are legally able to profit by posting a bail bond for somebody to get out of jail.  Credit card bail allows “third party” entities to make a tidy profit without being licensed.  It seems to skirt the licensing issues.
4. It seems to me to be predatory on unwary consumers.  Even though the customer is being charged a stated fee of 7%–that does not include the “real cost”.  What about the 2% cash advance fee charged by many credit card companies.  What about the fact that the cardholder may not be able to pay the monthly credit card bill and be charged a 10-35% interest charge?  Had the cardholder simply used a traditional bail bondman, the true cost would have likely been a solid 10% of the total bail.

I think that credit card bail is bad public policy.  It is my hope that California can find a way to abolish is completely.