Bail Bondsmen Feel the Squeeze of State Regulations

Oct 14, 2015

On August, 31st bail bond agents were arrested in California in what the Department of Insurance is calling “the largest enforcement action ever conducted by the department.” The raid was the result of a year investigation by the Santa Clara County District Attorney’s Office and the California Department of Insurance. The California Department of Insurance claims that the bondsmen violated the law when they colluded with inmates who alerted them when new inmates came into the jail. In some cases, bail agents illegally posted bail for inmates without permission. This is the beginning of a series of arrests as California seeks to crack down on bail bondsmen.

When a person is arrested, they generally stay in jail for a limited time until they can post bail. Sometimes prisoners post 10 percent of the bail amount to the bail bondsman who swears that they will appear in court.  Unfortunately, the bail bonds industry has gotten extremely competitive. Some bail agents even swarm courthouses and compete for new customers. Often they pitch really low deals in exchange of representation. In California, many bondsmen went even further by using inmates as informants. This was a violation of the law of jail agents.

The Santa Clara County District Attorney’s Office and the California Department of Insurance began their investigation when consumer complaints began to skyrocket. This made the department launch an investigation and listen in on calls from inside various Santa Clara County jails. The investigation uncovered a system where inmates would tip off bondsmen when new arrestees arrived. The state claims that bondsmen compensated informants by adding to inmate jail accounts.

The state began issuing warning letters to agents in 2013, however some bail agents declined to heed the state’s warnings. As a result, the state decided to arrest the bail agents who continued in the illegal practices. According to the Department of Insurance, licenses of the arrested agents were also suspended. More arrests and investigations of bail bond agents are on the horizon as a national debate heats up around the fairness and safety of the bail bonds system. From California to Connecticut, states are increasing scrutiny on bail bonds companies and their operations. Agents should fall into compliance with regulations as legislators attempt to clean house.

With the bail bonds industry under intense scrutiny, bail bonds merchants must allow customers to pay for bonds with more than just cash. With the EMB suite, your clients will be able to pay with credit, debit, checks, e-checks, by web, and more. eMerchantBroker.com will ensure your bail bonds merchant account is secure and compliant.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

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EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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