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.
Bond agents generally charge a fee of 10-15% of the total amount of the bail 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. As the practice of paying a 10% cash premium for a bond became widespread, 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", meaning the Bail Bondsman and term bounty hunter are the same. Each Bail Bondsman must re-apprehend his own fugitives. The bond agent is also allowed to sue the defendant for any money forfeited to the court should the defendant fail to appear.
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 (Illinois is not one of them).
The economically discriminatory effect of the bond system has been controversial, and subject to attempts at reform since the 1910s, at least. See, e.g., Frank Murphy's institution of a bond department at Detroit, Michigan's Recorder's Court.
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.
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