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Exposing Insurance Companies Profiting Off the Bail System

Armando Nava

A new ACLU and Color of Change report, “Selling Off Our Freedom: How Insurance Corporations Have Taken over Our Bail System” condemns for-profit businesses for their role in mass incarceration and racial inequality.

How Does Bail Work?

Most people know, either from experience or from reading the news, that people who are arrested might receive the option of paying bail in order to get out of jail during the pretrial period. Generally, judges set bail based on the type of crime for which the suspect has been arrested. Suspects may request lower bail, or request release on recognizance. Either way, suspects have to comply with conditions of release in order to avoid being arrested again.

Many countries offer the option of bail as an alternative to imprisonment while a defendant awaits trial, based on the principle that no one should be incarcerated before they’re proven guilty. This monetary deposit represents an agreement that the accused will show up for their court dates. After the trial, provided the suspect shows up to their court dates, he or she receives a refund.

What happens to bail money if the defendant forfeits it by not appearing in court? In such cases, local regulations stipulate how the money will be used, usually by the courts or law enforcement agencies. Forfeited bail belongs to the government, not to for-profit agencies.

Profiting Off the Bail System

Jailed suspects can post bail with the courts directly, or they can purchase bail bonds from private insurers. The practice of selling bail bonds for profit is unlawful in every country in the world, except the United States and the Philippines. Bail bondsmen who work for insurance companies target criminal defendants when selling their products, and they charge a non-refundable fee to post bail. Additionally, many corporations do not return the bail money after the trial, even when no convictions result. So, if you contract with an insurance company selling bail bonds, you will never see the money they collect as a fee on top of the bail payment. In some cases, you won’t even see the bail refunded by the courts — money to which you should be entitled.

How Insurance Corporations Create Inequalities

The report outlines several alarming ways in which for-profit insurance companies harm individuals and families, particularly people of color and low-income individuals and families:

  • Selective Contracts: Bail bondsmen can choose not to offer their product to individuals they consider high-risk. As private companies, they care about their bottom line and they’re unlikely to accept applications from people they think might not be able to pay the fees. This results in racial and income-based discrimination.
  • Lasting Debt: While posting bail with the courts results in a refund at the end of the trial, many for-profit companies keep the money, even if defendants comply with all court orders.
  • Exploitative Contracts: Families can be locked into payment plans long after their case is resolved. Hidden fees and penalties may apply. Through contracts, individuals and families often sign away their privacy by agreeing to searches, surveillance, and access to personal information.
  • Terms Allowing for Re-Arrest: In general, when you are awaiting trial, you can be arrested for fleeing prosecution or failure to appear in court. In one case study, a corporate contract allowed the company to revoke bail and seek re-arrest for late payments, disconnected phone numbers and accepting a job offer without immediately notifying the bail company.

Reforming the Bail System

Civil rights advocates have called for the elimination of for-profit bail companies for nearly a century. The very idea of having to pay to get out of jail when you are presumed innocent raises an ethical dilemma. The Eighth Amendment prohibits judges from setting excessive bail; while this prompts debate about how we define “excessive,” at least the protection exists.

The constitutional loophole? The 8th Amendment regulates government agencies, not for-profit insurance corporations. Prohibiting for-profit bail corporations is the first step to correcting these injustices; not to mention it will put us on par with most of the rest of the world.

For statistics, infographics, and case studies, access the full report for free.

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