A bail bond agent, or bondsman, is any person or corporation that will act as a surety and pledge money or property as bail for the appearance of persons accused in court. Although banks, insurance companies and other similar institutions are usually the sureties on other types of contracts (for example, to bond a contractor who is under a contractual obligation to pay for the completion of a construction project) such entities are reluctant to put their depositors’ or policyholders’ funds at the kind of risk involved in posting a bail bond. Bail bond agents, on the other hand, are usually in the business to cater to criminal defendants, often securing their customers’ release in just a few hours.
Bail bond agents are almost exclusively found in the United States and its former commonwealth, The Philippines. In most other countries bail is usually much less and the practice of bounty hunting is illegal.
The first modern bail bonds business in the United States, the system by which a person pays a percentage of the court specified bail amount to a professional bonds agent who puts up the cash as a guarantee that the person will appear in court, was established by Tom and Peter P. McDonough in San Francisco in 1898.
 Modern practice
Bond agents have a standing security agreement with local court officials, in which they agree to post an irrevocable “blanket” bond, which will pay the court if any defendant for whom the bond agent is responsible does not appear. The bond agent usually has an arrangement with an insurance company, bank or another credit provider to draw on such security, even during hours when the bank is not operating. This eliminates the need for the bondsman to deposit cash or property with the court every time a new defendant is bailed out.
All bail bond agents have lengthy bail bond agreements. All agreements in California are to be verified and certified by the California Department of Insurance. Most bail bond agreements are given to the bail bond agents by their insurers, and the insurers have already verified and certified all bail bond agreements for their agents.
Bond agents generally charge a fee of 10-15% of the total amount of the bail with a minimum of $100 in some states like Florida, required in order to post a bond for the amount. This fee is not refundable and represents the bond agent’s compensation for his or her services. Some states, such as North Carolina, charge a flat 15% where other states that charge 10% can also bill the defendant for phone calls, gas, mileage, anything that has to do with the apprehension of the subject, etc. One argument for abolishing bail bonding for profit has to do with the low rates of pay-out to states when defendants flee. Currently, in many states bail bondsmen owe thousands of dollars in forfeit fees.
As an alternative, some courts have recently instituted a practice of accepting 10% of the bond amount in cash, for example, by requiring a $10,000 bond or $1,000 in cash. In jurisdictions where the 10% cash alternative is available, the deposit is usually returned if the case is concluded without violation of the conditions of bail. This has the effect of giving the defendant or persons giving security for the defendant a substantial incentive to make the cash deposit rather than using a bail bond agent.
For large bail amounts, bond agents can generally obtain security against the assets of the defendant or persons willing to assist the defendant. For example, for a $100,000 bond for a person who owns a home, the bond agent would charge $10,000 and take a mortgage against the house for the full penal sum of the bond.
If the defendant fails to appear in court, the bond agent is allowed by law and/or contractual arrangement to bring the defendant to the jurisdiction of the court in order to recover the money paid out under the bond, usually through the use of a bounty hunter. Some states, such as North Carolina, have outlawed the use or licensing of “bounty hunters” so each bail bondsman must re-apprehend his own fugitives. The bond agent is also allowed to sue the indemnitors, any persons who guaranteed the defendants appearance in court, and or defendant for any money forfeited to the court should the defendant fail to appear.[clarification needed]
In most jurisdictions, bond agents have to be licensed to carry on business within the state. There are some more seemingly unlikely organizations that often provide bail bonds. AAA, for instance, will often extend its auto coverage to include local bail bonds for traffic related arrests. This provides a unique service to their members, and frees the member from needing immediate cash.
Four states—Illinois, Kentucky, Oregon, and Wisconsin—have completely banned commercial bail bonding, usually substituting the 10% cash deposit alternative described above. However, some of these states specifically allow AAA and similar organizations to continue providing bail bond services pursuant to insurance contracts or membership agreements.
The economically discriminatory effect of the bond system has been controversial and subject to attempts at reform since the 1910s. The market evidence indicates that judges in setting bail demanded lower probabilities of flight from minority defendants. See, for example, Frank Murphy‘s institution of a bond department at Detroit, Michigan‘s Recorder’s Court. Furthermore, the economic incentives of bonding for profit make it less likely that defendants charged with minor crimes (who are assigned lower amounts of bail) will be released. This is because a bail bondsman will not find it profitable to work on matters where the percentage of profit would yield $10 or 20. As such, bail bondsmen help release people with higher amounts of bail who are also charged with higher crimes, creating an imbalance in the numbers of people charged with minor crimes (low level misdemeanors) and increasing jail expenditures for this category of crimes.
A recent spate of high-profile cases[when?] involving bondsman misconduct has led to calls for increased regulation of the industry and/or outright abolition of the bail for profit industry. One of the most prominent cases in Louisiana, involved bribery of judges by a bail bonding agency and, after a far-reaching FBI investigation—code name “Operation Wrinkled Robe”—led to criminal charges and removal proceedings for various judges and police officers.
In addition to the use of bail bonds, a defendant may be released under other terms. These alternatives include own recognizance or signature bond, cash bond, surety bond, property bond, and citation release. Alternatives to bail are determined by the court.