How to Avoid Trouble – Part 1
09 Dec 2014
It’s a known fact in the bail industry that the best way to minimize your risk with a new client is to perform a very thorough due diligence. Shortcuts could mean trouble that will come to haunt you. Don’t slack on the requirements that keep your business stable just to increase your competitiveness. It only takes one missing piece of vital information or one missing document to turn a $1,000 premium into a $10,000 headache, and the higher the premium, the bigger the headache.
It’s not difficult to manage your due diligence to maintain a sound business practice. There are four major steps you should follow:
1. Research your client prior to posting bail.
2. Ask the right questions to get the right answers.
3. Secure the collateral.
4. Collect the premium.
Completing these steps and creating a routine habit will definitely make your bail business more successful. You will be protecting your livelihood and yourself.
One-Step at a Time…
Research your client prior to posting bail.
You probably won’t have to research every client who calls you because some will be obviously above board and if the bail amount is small, like less than $5,000, your liability will be limited. However, if the bond is larger, you do want to know if the defendant is worth the risk. Your time and cost is minimal when it comes to doing a quick background check, so avoid shortcuts and protect your business.
• A Simple Background Check – A background check can be performed on the Internet with costs that range from $35 to $200. These costs are negligible when you consider a $20,000 to $100,000 headache. This can save you from trying to track down a defendant that skips and doesn’t want to be found, especially if they don’t have any ties to the community. Plus, you will spend far more time and money trying to find them to save your business that you can really afford. In the end you may lose it all.
• Don’t Depend on Bounty Hunters for Every Bond – A bounty hunter should only be used when all else fails. If you come to rely on a bounty hunter for all skips, you will find this to be much too costly because you must pay them a fee and their expenses. What if the skip goes to another country? You’ll be paying for the bounty hunter to fly there as well. Cha-ching, cha-ching, cha-ching!
o You may also encounter a skip that you thought was reliable even after performing the necessary due diligence. In this situation calling a bounty hunter may be your only solution to try to find the defendant. This should happen on a rare occasion and should never be a consideration in determining whether or not to write a bond.
o If you have any doubt about a defendant but write the bond anyway, you are headed for failure…period. Don’t think that a bounty hunter is going to rescue you from writing a bad bond. Just don’t write it at all.
• If you have to debate, say “No.” – A good rule of thumb to follow is if you spend more than 5 to 10 minutes debating whether or not you should bail out someone, the answer is either “NO”, or require more collateral than you think you need. Rely on your ‘gut feelings’ and play it safe. Always think about the negative result…you are risking loss and failure of your business.
o Referral fees can save you from the liability. If the bond was $50,000, making your fee $5,000, and you’re uncertain about writing the bond, you could make a referral fee of $1,000 and avoid any liability by referring the defendant to a more experienced bail agent. Play it safe.
In this blog I addressed the first step in the four-step process to make sure that a new bail agent protects himself and his business. In Part 2 I will address the how to ask the right questions to help you determine if your potential client is a good or bad risk. Stay tuned.
Look for: How to Avoid Trouble – Part 2