Wednesday, August 18, 2010

Bail Bondsmen Face Tough Times

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Although many people assume that the bail bonds industry would shine during difficult economic times, it now faces multiple challenges that are putting a tremendous amount of pressure on bail agents. Bail bonds are far from recession proof and bail bondsmen are faced with an unprecedented business environment.

Bail bondsmen make their money by posting bonds to courts on behalf of defendants, thus securing their release. However, a number of states are pushing pretrial release programs that would allow defendants to be freed from jail without having to use a bail bondsman. Essentially, the court steps in to selectively release defendants it feels are suitable to be freed without paying bail.

Pretrial release program advocates point to the positive effects of counseling and rehabilitation that usually accompany these programs. While bail bond trade groups are quick to cite the increased taxpayer costs of pretrial release programs when the state facilitates the release rather than a bail bondsman. Not coincidentally, those selected for pretrial release programs are often the most attractive bail bonds customers. They are those perceived to be low flight risks and having a high likelihood of appearing in court as ordered. In the end, the more pretrial release programs take hold, the more pressure bondsmen will face from shrinking markets and competing with government programs.

Not only are bail bondsmen feeling pressure from a fundamental shift in the bail and release paradigm, but the economy has also hampered the industry. While crime usually increases during difficult economies, it doesn’t necessarily translate to more robust business for bondsmen. Bail bondsmen are in essence lenders and the credit of potential borrowers isn’t great.

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