The Importance of Completing Your Due Diligence
25 Nov 2014
The most successful bail agents have built their company’s based on performing careful due diligence. The process includes; initial assessments, background checks, verified collateral, and completed paperwork – these are the elements of the slow and steady growth I always talk about. Do all these things upfront and you will avoid forfeitures and protect your interest should a forfeiture occur.
It’s easy to skip steps in the due diligence process. And, it’s not unusual to think that, “If I skip this step I should be OK and not end up with a forfeited bond.” This is most likely when you will feel the pain because there is an old adage known as “Murphy’s Law…anything that can go wrong, will go wrong.” Believe it or not, this happens all the time and you need to be prepared for it. Therefore, you should not make the mistake of “skipping” any steps in the process of keeping your business, your livelihood, your bread and butter, and your life on track.
What if a defendant gives you a non-working phone number or a co-signer doesn’t really possess the title of a property? Trying to find the defendant will be much harder and cost the bail agent time and money that he cannot really afford to lose. This is why completing the due diligence for every bond you intend to write before you write it is so important. It will keep you from dealing with substantial losses that could lead to the failure of your business and everything you worked for.
Pressures of the Industry
The pressure to be first and do better than the guy down the street can cause a bail agent to skip some of the details that really matter in the due diligence process. Thinking that skipping a step won’t backfire is a misconception that often takes you by surprise and suddenly your faced with a forfeited bond. Now what? How do you pay the full amount of the bond and still stay afloat? You can look for the defendant, but that will cost your time and money and you may end up having to hire a bounty hunter, which will most likely eat up whatever’s left of the premium. So, with all that said, do you think skipping even one step in the due diligence process is worth all this?
Another pressure of the bail business is when a defendant decides to call a family member and a friend to bail him out. The family member contacts you, so you go through the usual process to get all the paperwork completed to put the bond together and go to the jail to bail out the defendant, only to learn when you get there that the friend had already bailed him out through a bail agent closer to the jail. This is not uncommon and something bail agents don’t have much control over. However, you might ask the person who calls you if they or someone else close to the defendant may have contacted another bail agent. This question can help you determine if another bail agent might be on this case already because you do not want to duplicate the efforts only to find when you arrive at the jail that the defendant has already been released. Obviously, this is a waste of your time and loss of revenue.
To stay competitive, bail agents will also be tempted to loosen up their requirements and “skip” a step in the due diligence process by offering less stringent terms in an effort to close the deal. This puts the bail agent in greater danger of ending up with a forfeited bond. And, if you don’t collect the premium up front, you won’t even have that as compensation if the defendant and co-signer skip without paying. Not the positive ending you seek with each deal closed.
As I always stress, you need to build your business slow and steady and with great caution regarding the people you are dealing with. Protecting yourself and your business should always be your #1 priority. You learn over time that you will come to know when people are lying or being honest about their situation. That’s the gut feeling you’ll get from the questions you ask and the answers you receive.
Remember when you were in school taking a test and you were told to go with your first answer, which is usually the right answer, but you think it through further and decide to go with your second thought, only to learn that it was the wrong answer? In the bail business your gut feeling, or first impression is usually the right one. Using caution in this industry is your friend and savior. Protect your business at all costs.