Bail companies accused of illegal overcharges in New Orleans

BATON ROUGE, La. (AP) - New Orleans bail companies routinely charge illegally excessive premiums for people to get released from the city’s jail, a watchdog group claims in a complaint filed Thursday with state regulators.

The Southern Poverty Law Center estimates New Orleans bail companies collectively have overcharged up to 50,000 people by roughly $5 million over the past 12 years.

The law center’s complaint urges the Louisiana Department of Insurance to investigate and suspend or revoke the licenses of any companies that don’t cease the practice or refund illegally collected premiums.

The Alabama-based center says it found at least 21 bail companies that customarily charge criminal defendants a premium of 13 percent of the face value of a bond set by a judge. The complaint says that rate is 1 percent higher than the maximum allowed under state law.

The New Orleans Advocate said a local bondsman, Matt Dennis, dismissed the idea that charging a 13 percent fee is illegal in New Orleans. Dennis argued in an email that the city has a “special exception” in a 2005 law that increased a “license fee” on bail bondsman from 2 percent to 3 percent, but only for Orleans Parish.

Companies keep 10 percent of the face value of the bond and disburse the rest to the court and offices of the district attorney, public defender and sheriff, according to the complaint.

In 2015, New Orleans judges imposed financial conditions of release on 90 percent of the defendants jailed on felony charges, the complaint says.

Defendants in felony cases are overcharged an average of $100 for each bail bond, according to the complaint. The law center says it spoke to one man who had to sell his truck and liquidate his savings to make a down payment on a premium after a bail company overcharged him by $900.

“The aggregate amount that bail bond companies have overcharged is staggering,” the complaint says. “This amount is substantial in a city where 27 (percent) of residents live in poverty - a rate two times higher than the poverty rate nationally.”