When Kiara Caldwell bailed her friend out of jail, little did she know it would turn into a nightmare of years of relentless harassing phone calls, threats and lawsuits.
Now she fights back.
The 31-year-old receptionist is challenging that in a class-action lawsuit filed in Alameda County this weekbad boy bailsfor locking people into illegal loan agreements that leave them drowning in debt.
Elissa Della-Piana – a Caldwell attorney and legal director for theAdvocates Committee for Civil Rights Under the ActBay Area Chapter: Called the class action case the first of its kind.
"We believe this is the first consumer class action lawsuit against bad boys or any other bail bonds company in California," he told San Jose Inside. "We've represented so many people in cases where bad boys broke the law, and we've seen just enough of them that we thought a class action lawsuit would be the best approach."
When a defendant can't afford their own release, companies like Bad Boys offer to pay on their behalf for a non-refundable fee, typically around 10 percent of the bail. Caldwell's lawsuit, filed Tuesday, alleges that the surety giant violated consumer protection laws by deceptively hiring co-signers for the full premium of "loan surety" contracts that require monthly payments.
Officials at Bad Boys Bail Bonds, a South Bay firm founded in 1998 by C. Jeffrey Stanley, a former bounty hunter with a penchant for outright candorMarketing Tactics– still have to return several requests for comments.
If Caldwell had known what she was getting herself into, she would never have signed the contract that Bad Boys presented in the hours after her friend's arrest on June 21, 2018.
The word is link
The ordeal began when a bail bondsman called Caldwell about her close friend, who she considered a sister, and was accused of shoplifting. As a security guard then taking classes at Chabot College, Caldwell said he had little money to spare.
But she says she knew her friend had no one to turn to.
So she showed up at the Oakland branch of Bad Boys Bail Bonds to meet the guy who called her. The officer told Caldwell that authorities had set the girlfriend's bail at $5,000 and that he would need $1,000 to bail her out of jail.
Caldwell offered to shell out what he could: $500. Because Bad Boys refused to pay by direct debit, the agent told him to go down the street to get cash from an ATM.
The agent bombarded Caldwell with paperwork, she says, asking for information about her job, her family's phone numbers, and the make and model of her car. Caldwell had no bail experience and complied, although she says she felt rushed and just wanted to jump through hoops to free her friend.
"The whole thing took about 15 minutes from start to finish," he recalls.
At no point did the bail bondsman declare Caldwell's obligation as a co-signer of the entire $4,5000 bounty, the lawsuit says. She says she had no idea the $500 was considered the first installment of a monthly payment plan.
When those payments came due, he says, collectors were adamant.
"They started calling all the time, calling my mom, calling my work, calling all the time, non-stop," Cadlwell says in a phone call. “Then they sued me, which stressed me out even more. I didn't have and still don't have that money to give them. If I had done that, I would have paid her to just leave."
Many people who receive these phone calls end up feeling this way.
“These contracts are signed at the most vulnerable moments in people's lives, when a loved one is incarcerated and that person is not only so important to them, but also a breadwinner or childcare provider,” explains Della-Piana. . "Leaving them in jail would create a lot of terrible knock-on effects. That's a lot of pressure. And many people don't realize at this moment that they are signing a debt that they cannot pay.
Often, a serf doesn't find out about his obligation until a collection agency calls him, which Della-Piana says consistently does, using tactics expressly prohibited by consumer protection laws. They call friends, family and employers, she says. They threaten to destroy people's cars and homes.
"Then there's the way Bad Boys, along with other commercial surety companies, is getting out of that debt," she says. “They are doing this in a way that is meant to carry the weight of the criminal justice system behind them. The implicit threat is that people will go to jail if they don't pay, leading people to make incredible sacrifices for the rent, food and healthcare costs their families need to survive."
Kiara Caldwell, 31, takes Bad Boys to court.
Accounts Payable Checks
Recognizing that co-signers of consumer loan agreements can be confused or misled as to their obligations, California has enacted strict disclosure requirements for lenders.
Under Civil Code Section 1799.91, a company must notify co-signers of their liability under a loan agreement. The notice must be written directly above the space reserved for your signature or on a separate sheet of paper.
The law even requires a specific language and font size for the notice, which must explain that the guarantor is expected to vouch for the debt if the loan does not, and you should think carefully before assuming that responsibility.
The disclosure should alert the co-signer to the fact that they may also have to pay late fees or collection costs, that they may be at risk of litigation and wage garnishment, and that a default could become part of their credit history.
If a creditor fails to comply with these disclosure requirements, state law prohibits them from enforcing the contract at all.
The Class Actionsubmitted by Caldwell says bad boys naturally avoided those disclosures required by law. And when these co-signers default on payments, the company often takes them to court.
That's what they did to Caldwell. The Bad Boys sued Caldwell exactly a year ago, demanding payment of $4,500 plus late fees and other costs. However, the lawsuit gave him the resolve to take the matter to court.
It remains to be seen how many consumers fell victim to the scheme described in Caldwell's case, but Della-Piana hopes to use electronic court records and Bad Boys Bail Bonds' internal databases to find out.
Anecdotally, he says he has reason to believe the number of victims is in the thousands and that bail bonds firm South Bay has been pressuring people into legally dubious loan deals since at least 2015.
The Della Piana branch of the Civil Rights Advocate Committee has been helping people fight their loan deals through a designated bail bonds clinic for the past few years. Although existing consumer protections are designed to prevent, among other things, the type of fraud described in the Caldwell case, she hopes state legislatures would refine those laws by clarifying their application to the surety industry.
Fortunately, he says, a judge in the Contra Costa Superior Court set the laws applicable to commercial bonds, opening the door to a countersuit against Bad Boys. A class action lawsuit, Della-Piana says, would simply apply that decision more broadly.
Even if Californians end up agreeing with cash depositProposal 25On Nov. 3, Della-Piana says this won't necessarily stop collectors from pursuing co-signers for illegally acquired credit deals.
"Our concern is that if they do, with all this outstanding debt, these bonding companies might accelerate their efforts to collect it illegally," he says. "It is possible that they will make one last push to squeeze as much money out of this industry as possible while they still can."
Jennifer Wadsworth is the former news editor of San Jose Inside and Metro Silicon Valley. Follow her on Twitter at@jennwadsworth.
What legal rights does a co borrower have? ›
A co-borrower not only shares legal responsibility for your debt but also has legal rights to your asset, unlike a co-signer. If two people are co-borrowers on a mortgage, for example, both would have their names on the title to the house.What rights does a co-signer have? ›
A co-signer takes on all the rights and responsibilities of a loan along with the borrower. This means that if the borrower can't make a payment on the loan, the co-signer is responsible. Cosigning a loan can also affect the credit score of the co-signer for better or for worse.Can a cosigner get garnished? ›
Lenders can garnish the wages of co-signers.
If the borrower and co-signer cannot repay a loan, the lender can sue the co-signer to garnish wages and even property in order to satisfy the repayment.
To get a co-signer release you will first need to contact your lender. After contacting them you can request the release — if the lender offers it. This is just paperwork that removes the co-signer from the loan and places you, the primary borrower, as the sole borrower on the loan.What are predatory lending practices? ›
What is Predatory Lending? Predatory lending practices, broadly defined, are the fraudulent, deceptive, and unfair tactics some people use to dupe us into mortgage loans that we can't afford. Burdened with high mortgage debts, the victims of predatory lending can't spare the money to keep their houses in good repair.Is a co signer legally obligated to pay a loan? ›
What Happens When You Cosign? When you cosign a loan, you become legally obligated to repay the loan if the borrower doesn't pay it. Most cosigners believe when they sign the papers that the borrower will be able to repay the loan on his or her own.Can a cosigner be held accountable? ›
Unfortunately, co-signers are still held liable even if other debts are discharged. This backup responsibility was the lender's entire reason for requesting a co-signer – to ensure someone will be able to pay the debt if the primary borrower is unable to.Can cosigner get in trouble? ›
Co-signers take on a lot of risk when they agree to guarantee a loan. Not only are they responsible for repayment if the borrower defaults, cosigning for a loan can harm the co-signer's credit rating. If the primary borrower makes a late payment, it may appear on the co-signer's credit report and score.What legal responsibilities does a cosigner have? ›
A co-signer takes full responsibility for paying back a loan, along with the primary borrower. Often a co-signer will be a family member. The co-signer is obligated to pay any missed payments and even the full amount of the loan if the borrower doesn't pay.How can co signers protect themselves? ›
- Serve as a co-signer only for close friends or relatives. A big risk that comes with acting as a loan co-signer is potential damage to your credit score. ...
- Make sure your name is on the vehicle title. ...
- Create a contract. ...
- Track monthly payments. ...
- Ensure you can afford payments.
How long is a co-signer responsible? ›
Being a cosigner is a long-term commitment; they're responsible for your student loan until it's paid in full.Can a cosigner be denied? ›
If they lack sufficient income, they won't be able to offset the lender's risk and may not be able to cosign. To determine whether a potential cosigner has enough income, the lender will likely calculate their debt-to-income ratio (DTI), which compares their total monthly debt payments with their earnings.Can you sue if you are a cosigner? ›
Yes, you can sue the person you co-signed for if they don't make the payments they promised to make. You may be able to get a judgment against them in court, but it could be hard to collect on that money, since they didn't pay the debt in the first place.How do I bypass a cosigner? ›
- Become a Subtenant or Roommate. ...
- Use a Co-Signer Service. ...
- Try a Peer-to-Peer Lender. ...
- Establish or Rebuild Your Credit History.
Fortunately, you can have your name removed, but you will have to take the appropriate steps depending on the cosigned loan type. Basically, you have two options: You can enable the main borrower to assume total control of the debt or you can get rid of the debt entirely.How do you prove predatory lending? ›
- Sign 1 - Big Fees. ...
- Sign 2 - Penalties For Paying Off Early. ...
- Sign 3 - Inflated Interest Rates From Brokers. ...
- Sign 4 - Steering And Targeting. ...
- Sign 5 - Adjustable Interest Rates That "Explode" ...
- Sign 6 - Promises To Fix Problems With Future Refinances.
An unlawful loan is a loan that fails to comply with—or contravenes—any provision of prevailing lending laws. Examples of unlawful loans include loans or credit accounts with excessively high-interest rates or ones that exceed the legal size limits that a lender is permitted to extend.What are examples of fair lending violations? ›
For example, if a lender refuses to make a mortgage loan because of your race or ethnicity, or if a lender charges excessive fees to refinance your current mortgage loan based on your race or ethnicity, the lender is in violation of the federal Fair Housing Act.What risk does a cosigner take? ›
If the primary borrower fails to make a payment for any reason, the cosigner will be held liable for the missed payments. The lender can sue the cosigner for interest, late fees, and any attorney's fees involved in collection.Are Cosigners liable? ›
A cosigner on a loan is legally responsible for the debt if the primary borrower defaults. Cosigning a loan will show up on your credit report and can impact your credit score if the primary borrower pays late or defaults. Cosigners may sign for student loans, personal loans, credit cards, and even mortgages.
Do Cosigners have to pay anything? ›
If you co-sign a loan, you are legally obligated to repay the loan in full. Co-signing a loan does not mean serving as a character reference for someone else. When you co-sign, you promise to pay the loan yourself.How much liability does a cosigner have? ›
A co-signer typically has no financial responsibility except paying the loan.Is a cosigner a legal owner? ›
What is a Co-Signer? A co-signer applies for the home loan right along with you. However, they are not on the title of the home. The co-signers name is only on the loan, meaning that while they are financially responsible for paying back the mortgage, they do not have ownership of the property.Is a cosigner considered collateral? ›
A co-signer won't have to put up collateral or accept responsibility for regular payments. Also, if the primary borrower makes on-time payments, the co-signer will never have to worry about the loan — and may still benefit from an improved credit score. .Why is Cosigning never a good idea? ›
It could limit your borrowing power.
Potential creditors decide whether or not to lend you money by looking at your existing debt-to-income ratio. Depending on how much debt you already have, the addition of the cosigned loan on your credit reports may make it look like you have more debt than you can handle.
In general, to qualify for co-signer release, borrowers must prove they have the ability to pay off the loan on their own, in addition to having no late payments for a set period of time, says Kaplan. The lender will also review the borrower's full credit history and assess current income relative to the loan payments.Can a cosigner change their mind? ›
You can't remove yourself from a loan contract just because the other borrower isn't holding up their end. Your responsibility doesn't end until the contract is fulfilled and the loan is repaid.What happens to cosigner if borrower does not pay? ›
If you cosign a debt and the borrower doesn't pay, in most every case you will be responsible for the entire debt. And, the lender does not have to try to collect from the borrower. It can look to you even if it might be possible for it to collect from the borrower.What is the correct definition of capacity for potential cosigners? ›
Capital: A lender will want to know if you have valuable assets such as real estate, personal property, investments, or savings with which to repay debt if income is unavailable. Capacity: This refers to your ability to repay the debt.What are the potential consequences of failing to live up to your responsibilities as a cosigner? ›
Late fees, penalties and accruing interest that will increase the principal loan balance. Short-term credit damage if the loan remains unpaid. Legal action by the lender if your friend cannot or will not pay. Lost income or wage garnishment.
What affects a co signer? ›
Here are some common ways your credit score could be affected if you are a co-signer: Missed or late payments: Co-signers are required to make payments on the account if the main account holder misses payments. If the consignee makes late payments, or misses them altogether, then your credit score could drop.How fast can you remove a cosigner? ›
See if your loan has cosigner release
If the conditions are met, the lender will remove the cosigner from the loan. The lender may require two years of on-time payments, for example. If that's the case, after the 24th consecutive month of payments, there'd be an opportunity to get the cosigner off the loan.
Normally, a cosigner will have to stay on the mortgage for a minimum of one year. From my experience, normally a cosigner will stay on a mortgage for several years. When the borrower is ready to have the cosigner removed, they contact the lender to then re-qualify without the cosigner.When can a cosigner be removed? ›
You Can Release Your Cosigner
When you refinance, you pay off all of your old auto debt and start making payments on the new loan. Since the old loans are paid off, the cosigner of those loans will be released. The borrower who refinances then solely holds the obligation to repay the loan.
Good credit: Cosigners typically need good to excellent credit to be a cosigner — this usually means having a credit score of 700 or higher, though some lenders might accept lower scores than this. Stable income: Lenders want to see that your cosigner can afford to repay the loan if you can't make your payments.Why would a person refuse to cosign for a loan? ›
Co-signing for someone else could affect you significantly in any future loans you may apply for. Lenders refer to this situation as someone having too much credit and is often used as a reason to deny a loan application.Can a cosigner be released? ›
Apply to release your cosigner. You can apply to release your cosigner from an open and active loan after you graduate or complete your certificate, make 12 on-time principal and interest payments, and meet certain credit requirements.Can a cosigner be removed from a contract? ›
Removing a Co-Signer From a Car Loan Is Possible
If you had a co-signer on the original loan but no longer need or want that connection, you can have that co-signer removed from the loan. You can request a co-signer release, refinance the loan, or sell the car and pay off the original loan.
- Make sure the primary borrower understands the risks. Many people who ask you to cosign don't fully understand the risk they're asking you to take on. ...
- Provide a justification -- if you want to. ...
- Offer alternatives to help.
You usually do this by filing a quitclaim deed, in which your ex-spouse gives up all rights to the property. Your ex should sign the quitclaim deed in front of a notary. Once this document is notarized, you file it with the county. This publicly removes the former partner's name from the property deed and the mortgage.
What credit score do you need to not have a cosigner? ›
Generally, a cosigner is only needed when your credit score or income may not be strong enough to meet a financial institution's underwriting guidelines. If you have a stronger credit score, typically 650 and above, along with sufficient income to cover the loan payment, it's likely you will not need a co-signer.Can a co-borrower sue a co-borrower? ›
Yes, you can sue the person you co-signed for if they don't make the payments they promised to make. You may be able to get a judgment against them in court, but it could be hard to collect on that money, since they didn't pay the debt in the first place.Can a co-borrower take possession of the house? ›
Remember that a co-signer is not on the title of the property and cannot take ownership of it. Getting a home loan with a partner is the same as if applying solo. Each party will need to provide proof of income, assets and bank statements, proof of identity, and other documents.Can you remove a co-borrower from a mortgage? ›
Removing a cosigner or co-borrower from a mortgage almost always requires paying off the loan in full or refinancing by getting a new loan in your own name. Under rare circumstances, though, the lender may allow you to take over an existing mortgage from your other signer.Is a co-borrower The owner of a house? ›
In most cases, co-signing on a loan makes you a co-borrower, which means you're buying the home alongside the primary borrower. Being a co-borrower means you'll be responsible for the loan if the primary borrower defaults.What is the risk of being a co-borrower? ›
As a cosigner, not only will your credit scores fall, but you'll also be liable for repayment of the debt, including late fees and collection costs. The lender can come after you as though you were the primary borrower. The lender might contact you and tell you that the loan is delinquent.What is the liability of co-borrower? ›
A co-borrower is a person who takes a joint loan along with the primary borrower. S/he is liable to share the responsibility of loan repayment equally. A co-borrower can only enjoy the tax benefits if s/he is a co-owner of the property as well.Can adverse possession be claimed against co owner? ›
Thus, a co-owner, can under law, claim title by adverse possession against another co-owner who can, of course, file appropriate suit including suit for joint possession within time prescribed by law."Can a cosigner take you to court? ›
Can a cosigner take you to court? If you're the primary borrower on a debt, your cosigner can take you to court for: Recovery of money paid: they can sue you to recover the money they've paid towards the loan. Fraud: they can sue you if you signed their name to the loan without their permission.What is the difference between a co signer and a co borrower in an auto loan? ›
A co-borrower has more responsibility (and ownership) than a co-signer because a co-borrower's name is on the loan, and they are expected to make payments. A co-signer only backs your loan and will not need to make payments unless you are unable to.
Does a co-borrower need to be on title? ›
As a mortgage co-borrower, you: Must be listed on the title. Have ownership interest. Obligated to pay the monthly payments.
You usually do this by filing a quitclaim deed, in which your ex-spouse gives up all rights to the property. Your ex should sign the quitclaim deed in front of a notary. Once this document is notarized, you file it with the county. This publicly removes the former partner's name from the property deed and the mortgage.What is a loan assumption agreement? ›
Updated March 7, 2022. In real estate transactions, an assumption agreement allows a third party to “assume” or take over the loan of the property's seller. Mortgages may be assumed when the house is sold, a divorcing spouse is awarded the property in a settlement or when someone inherits property.What is the difference between co-owner and co-signer? ›
A co-signer is a person who is equally responsible for paying off the loan, but doesn't have any legal ownership of the vehicle. A co-owner has equal claim towards it.What is the difference between co-owner and co-borrower? ›
A co-borrower applies for a loan along with the primary borrower and both bear the legal responsibility of repayment. A Co-owner is an individual that has a legal share in the property along with the primary borrower.What is the difference between co-owner and joint owner? ›
Co-owners mean all the owners of a property. If the property is owned by more than one person, it is called joint ownership. In case of coparcenary, the male members and daughters have a common and an equal interest in ancestral property.