Unfair Trade Practices, Prohibited Conduct, and Fiduciary Responsibilities
Prohibited conduct
Unfair trade practices and prohibited conduct include soliciting business in or near a jail or courthouse in a prohibited manner, paying or receiving rebates or kickbacks, recommending attorneys, misrepresenting bond terms, threatening defendants or indemnitors, and commingling trust funds. The bondsman owes fiduciary duties to collateral depositors and must account for funds. A bondsman cannot act as an attorney or give legal advice and cannot use coercion to collect debts.
Traps: “A bondsman may recommend a lawyer if disclosed”-generally prohibited. “Jail solicitation is allowed with permission”-no. “Collateral can be spent as business income”-no; it is held subject to accounting and return. Also watch for questions that treat a bondsman’s fiduciary duty as ending when the bond is written; the duty continues through exoneration and collateral return.
Worked example
A bondsman tells an arrestee, “I’ll get you out if you hire my lawyer.” This is prohibited attorney referral and solicitation; discipline and penalties follow. The bondsman may also face license action for using the bond transaction to steer legal business.
Rule of thumb: “No jail solicitation, no attorney referrals, no commingling.” Fiduciary duty means the depositor’s collateral is not the bondsman’s money.