Monday, March 22, 2010

Bail Bonds: The Importance of Collections in the Post Lehman World

In an effort to provide valuable information to our family of bail bond agents around the country, we are constantly scanning the financial environment to look at trends and identify issues that could be important to our industry. Since the “great recession” began in 2008, one area of particular interest to AIA and its family of agents is the issue of collections on bail bond premiums and forfeitures.

Due to a declining real estate market and high unemployment, the availability of cash for all large retail transactions has shrunk compared to the period prior to 2008. The impact of this lack of liquidity has been felt by bail agents throughout the country who are trying to provide a valuable service to the criminal justice system and their clients yet are confronted with indemnitors who do not have the adequate funds to pay for the premiums due on bail bonds. AIA is exploring ways to help our agents improve their collection systems in instances where they are owed money either for premium or costs relating to forfeitures on bail bonds.

One example of the importance of speedy recovery on accounts receivable is some information we discovered when looking at the National Collection and Credit Risk Conference currently being held in Miami, Florida. According to the people running this conference, the numbers of credit issuers (e.g. Banks and other lenders and providers of credit) who have signed up to attend this conference far exceed the number of collection agencies. This phenomenon is a clear indication of the emphasis that issuers of credit are placing on how to assess the risk of lending in today’s economy to speed up their recovery in 2010.

As I have said before in this bail bond industry blog; effective underwriting and the thorough assessment of an indemnitor’s ability to pay on credit extended coupled with solid collections practices at the retail level are going to be key drivers of success in the future for bail bond agencies. This is true not only for bail bond agencies, but for all retail operations that provide credit to their customers and clients. At AIA, we are continuing to explore ways that we can help our family of bail agents improve their collection processes. You should be on the lookout for these innovative changes to be announced sometime in 2010.

As always, I encourage your comments or questions regarding this bail bond industry blog.

Tuesday, March 16, 2010

Virginia on My Mind…the Importance of Education in the Fight Against Pretrial Service Agencies

I would like to start this bail bond industry blog by taking my hat off to the hard working bail agents in Virginia and the work of Virginians for the Preservation of Bail. They set a new standard in our industry for getting bail bond agents to rally and fight together for a cause…something that historically has been sort of an achilles heel for the bail bond industry. I also was impressed by their creative use of both traditional and online communications, especially the utilization of social media in getting people to participate in the conversation and keeping them informed. Even the bail bond insurance companies all seem to be in alignment around this particular fight. It was actually really exciting to watch everything unfold. Unfortunately, with the Senate voting 8-7 against HB 728, the momentum has been interrupted. While this may seem like a roadblock, it really needs to be seen simply as a bump in the road. There will be more opportunities to continue the fight and I urge our friends in Virginia to keep their heads up and not to go away in defeat (and from the initial look of things, that does not look like it will easily happen to this new group). The progress that has been made should be seen as a way to go back to the drawing board and come out again stronger. In fact we are seeing other states like Florida rallying off of Virginia’s efforts and energy. My guess is that this is only the beginning.

Upon hearing the results out of Virginia, our executive team got together last Tuesday to discuss Virginia as well as other pretrial services hot spots around the country. What came out of this meeting was a lot of new ideas and strategies, but there was one consistent and important tactic that everyone thought was paramount to having success in the fight against Pretrial Services, and that is education. While the Virginia effort did a fantastic job of educating and informing the public (proven by their recent survey citing 75% of consumers prefer private surety bail bond agents over pretrial services), we can only wish that the message got more fully absorbed by key decision makers in the house and even more importantly, the Sheriffs groups.

Law enforcement has always been a tough audience for the bail bond industry, especially in its fight against Pretrial Service Agencies. While it is not their fault, it seems that many Sheriffs have the mentality that “we lock them up and bail agents let them out.” As much as we all know that this is far from reality, it unfortunately seems to be their perception and a tough one to get past. Additionally, law enforcement has a pretty strong connection to Pretrial Service Agencies through their “public service” make-up and sometimes even their physical locations. In fact, in many circumstances Pretrial Service Agencies sit right in the Sheriff’s office. So it is not difficult to see where this affinity comes from.

So why would the Sheriffs support a function in Pretrial Service Agencies that increases crime and crime victims (a fact proven by the Department of Justice, Bureau of Justice Statistics study) while admonishing a group of taxpaying small businesses (being Bail bond agents) who fully support Sheriffs’ and their important role in the justice system. We think it comes down to a lack of understanding and education. Sheriffs are just like consumers, legislators and other influential groups in their lack of knowledge around the role of bail bondsman. It is incumbent on the entire bail bond industry to try and educate these important audiences on the true value of the bail industry. They need to understand the role of the bail agent in ensuring that defendants truly have their day in court and that they are not recidivistic while they are awaiting trial…two areas in which we all know Pretrial Service Agencies fail.

I will continue to post blogs on the topic of education and its importance in our fight. I look forward to your comments.

Wednesday, March 10, 2010

Pretrial Release Programs Looking to Buy Some Facts

The Pretrial Justice Institute (PJI) sent out their monthly newsletter on Friday with a story about a new tool they have developed intended to help Pretrial Services Agencies identify the risk associated with a specific defendant. According to the PJI, this new tool, “The Pretrial Risk Assessment is an objective, quantifiable instrument that provides a consistent and valid method of predicting risk of failure-to-appear, new criminal arrest, and technical violations while on pretrial release.” As I read this, I could hardly hold back the laughter. To hear the words “objective, quantifiable and Pretrial Services” all in the same sentence is not only laughable but pretty amazing. Especially since nothing they do, especially in terms of their effectiveness, has been quantifiable by them. In fact, I recently read through the ongoing conversation on the “Facebookers Against Pretrial Release” Facebook page. This community of over 600 people talks of how they have been sitting around for months waiting for any kind of “proof, numbers or statistics” that backup any of the claims being made by Pretrial Service Agencies and their ability to lower jail populations and reduce costs. We all know from the Pasco County Florida example that doesn’t happen, let alone their inability to track defendants and lower their rates of recidivism.

In the hope of finally trying to justify their existence, Pretrial Agency supporters have developed this new tool based on research conducted by a company called Luminosity. Luminosity as a group is extremely pro-government sponsored pretrial release and obviously anti-bail…and to be honest, in my opinion, anything but objective in their research. So it looks to me that when supporters of Pretrial Release Services make their claims and attempt to show supporting statistics, they use biased, store-bought research that is tailored to give them the answers they want.

On the other hand, the research that we, the bail bond industry, have shared with legislators, bail agents, bail bond sureties and judges around the country is from the US Department of Justice, Bureau of Justice Statistics. The bail bond industry did not pay for this research, a group of bail bond insurance companies did not pressure politicians to conduct the survey, it was a completely objective look at what is the most effective and efficient form of pretrial release looking at all forms available. The amazing thing about the BJS research is that time after time, year after year, from the early 1990s through the early 2000’s, until the research was stopped and then conducted again in 2007, the results have been incredibly consistent. In fact, in each case government sponsored pretrial service agencies performed the weakest while private surety bail performed overwhelmingly the best. If you would like to review the results of the most recent Bureau of Justice Statistics, visit and download a FREE whitepaper.

I would love to hear your thoughts.

Monday, March 8, 2010

Pretrial Release Programs Finding More Tax Dollars to Waste

If you already subscribe to AIA Insight, than you probably saw a great article in our “Special Pretrial Issue” sent Friday afternoon…if you don’t receive our Insight newsletter than you may have seen this article through another source. However, if you have no idea what I am referring to, please click here to see a powerful WebMemo written by David Muhlhausen, Ph.D., the Senior Policy Analyst in the Center for Data Analysis at The Heritage Foundation, on how Pretrial Service Agencies are able to tap into funds provided through the “Economic Stimulus” program.

After reading this article, it is hard not to cringe with frustration and disbelief. The fact that our hard earned tax dollars are being spent to give grants to organizations that are designed to save money, but have only proven to do the complete opposite of that, is incredibly disheartening and flat out disappointing. I have written a couple blogs on Pretrial Release over the past few months, but I thought I would share my thoughts once again. At the same time, I invite everyone out there to comment and share their thoughts with me.

Anyone who has been in the bail bond industry for the past 30 years has seen these Pretrial Programs surface and disappear over and over again. However, today, it seems like wherever you turn there is another article on a county adding Pretrial Services or dropping Pretrial Services. Even though there is so much noise on the subject right now, the reality is that government sponsored pretrial release programs have never been able to stand up to their promises or hype. And the best part is, when asked to justify their existence; they are incapable of providing tangible statistics other than how much a jail bed costs or how many people who happen to be in jail. So, what is their solution? Let everyone out…because people are naturally good and responsible and will show up for their day in court because it is the right thing to do. Unfortunately this “Fantasy Land’ view of the world and the criminal justice system comes at the expense of taxpaying citizens who go about living our lives in a responsible way, only to have our tax dollars go to making our streets and neighborhoods less safe. Pretty crazy stuff, huh?

If there is a silver lining to all this, I can honestly say that I have been impressed with the tenacity and fight that bail bond agents and bail bond insurance companies have shown. With the Virginian’s for the Preservation of Bail making headlines in Virginia, and now Bail Works starting up in Florida, it is nice to see the bail bond industry work together in a cohesive and singular way. At the end of the day, I know in my heart and my mind that we will continue to win the fight against these ineffective government programs. Ultimately, there is a place for them and a place for us to coexist and do what we do best. Let them provide release to the truly indigent, and let private surety bail provide release to those individuals who can afford bail and even more, take on the responsibility of ensuring that those release ultimately show up at court…because that is the goal right?

I look forward to hearing your comments.

Wednesday, March 3, 2010

How to Differentiate Your Bail Bond Agency in the Marketplace

As the retail bail bond business gets more competitive, our team is often asked by our agents, “How can I differentiate myself from my competitors?” While the answer to this question is not a single thing, there are a number of strategies that retail bail bond agents can execute to better position themselves against the competition. I have provided a few of the basics below.
  • Define yourself - Who are you and what do you want to be? I know this may sound like a weird question, but it is an extremely important one to ask yourself and your employees. If you want to tell customers why you are different, you need to have something meaningful to tell them. Start by thinking about what makes your company unique. What do you do better than everyone else? Is it service, reliability, trust, etc.? Find that one or two things and stake your claim to it.

  • Talk with customers - What do your customers want and need? How well do you know your customers? What are they looking for (products/services)? I have heard the following statement from several marketing consultants over the past few years, “You can want to be the best ‘blue’ company in the world, but if everyone wants a ‘red’ company, it doesn’t matter how good of a blue company you are.” I think this statement does a good job in emphasizing the need to be meaningful and relevant to your customers. Give them what they want not what you think they want.

  • Communicate, Communicate, Communicate – Once you know yourself and your customers, communicate like crazy, but remember to do so consistently. Why do we all know Nike’s tagline, “Just Do It”? Because they hit us with it over and over and over again. Good communications are about consistency, relevance and impact. Achieve all three of those and you will reap the benefits.

  • Deliver – Once you make the promise of your brand through your communications, you must now deliver on it. And delivering on that promise translates into everything you do…what your service level is like, what your retail office looks like (is it clean, dirty, welcoming), how your employees act, etc. You can’t just “talk the talk” in this business…it really comes down to “walking the walk” and delivering for your customers. That is how great reputations and companies are built.

The last thing I would add to the above items, is to look for the things around you that you can leverage in your communications that are complementary to who you are as a company. The best way I can explain this is through a recent interaction we had with an agent of ours. This agent told us about a recent call he received to post a bail bond. The woman on the phone had never done anything like this before and she was very nervous and unsure to say the least. Our agent calmly began to explain to this woman that his bail bond agency was part of a network of other agents that wrote for the industry’s oldest and largest bail bond insurance company, AIA. He then directed her to our website and explained that we had over 176 years of experience through our family of bail bond insurance companies. Ultimately the agent was able to put the woman at ease and write the bond. When I first heard this story, it really got me thinking about the role that a bail surety can play in the marketing of bail bonds to consumers. As much as we are in the background, our brand is an asset to our agents and how they potentially can differentiate themselves in the market. At the end of the day, that really is something special and something that fully represents what is behind the paper at AIA. I would love to hear your comments.