SPLC: Louisiana Department of Insurance Orders Bail Bond Companies to Return Millions in Excess Fees Charged to Low-income Defendants
Estimated 50,000 People Could Get Money Back
NEW ORLEANS – A directive by the Louisiana Department of Insurance orders bail bond companies and their insurers underwriting bail bonds in Orleans Parish to return an estimated $6 million in illegal profits to as many as 50,000 people.
The following statement is from Micah West, senior staff attorney for the Southern Poverty Law Center (SPLC):
“For more than a decade, most New Orleans-based bail bond companies have thumbed their noses at state law and cheated tens of thousands of low-income people and their families out of millions of dollars. This casual and routine thievery ends today thanks to the order by the Louisiana Department of Insurance, which found that these bail bond companies routinely overcharged defendants and which requires them to return their ill-gotten profits by no later than June 1, 2019.
“We believe the Commissioner’s directive demonstrates why money should not be a factor in determining who is detained or released pretrial as it creates perverse incentives for for-profit bail bond companies to take advantage of the most vulnerable people in our communities.”
In September 2017, the SPLC filed a complaint with the Louisiana Department of Insurance – which regulates the bail bond industry – after discovering that bail bond companies in New Orleans and their insurance underwriters routinely overcharged low-income defendants and their families premiums in excess of the 12 percent premium allowed under state law. The complaint asked 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 commissioner’s directive warns bail bond companies that they could be subject to the state’s criminal theft laws if they do not return the ill-gotten profits or be fined or have their bail bond licenses suspended. SPLC estimated that, on average, bail bond companies overcharged defendants and their families $100 to underwrite a bail bond or collectively about $6 million over nearly 14 years.
