When obtaining and working with surety bonds, one thing every person should look out for is fraud. Being the victim of surety bond fraud not only means you lose out on the funds you use to acquire the bond, it can also lead to catastrophic consequences if your bond is being used in a court case. Surety bond fraud can sink court cases, deny protected persons the benefits and protections they need and cause a lot of other headaches for guardians, conservators and anyone else involved in the process.
Important note: if you think someone who has a bond has committed fraud, talk to the court or the police.
Fortunately, avoiding surety bond fraud is simple if you know what to be on the lookout for. Follow these tips to make sure the bond you obtain will legitimately provide the coverage it is written to provide.
Read the Bond
When you obtain your bond, make sure you read it thoroughly to make sure it does what it is supposed to do (i.e. does it provide the coverage you need). Some states have a rigid template for bond forms, and some less than reputable surety companies can change the language of the bond to fit this template. They may even include language that is not supposed to be in the bond in the first place.
It is vitally important to read the bond form and understand fully what you are signing before signing it.
Appoint the Right People to Important Positions
Appointing the right guardian or conservator is an important step in avoiding surety bond fraud. Make sure you know who you are appointing to this position, and make sure that they are reputable and of good character. Many people appoint a family member or close friend. Regardless of who you appoint, make sure you can trust them fully.
Work with a Reputable Surety Agency
When it comes to surety bond agencies, reputation really does matter. Not only will working with an established agency make the entire process flow more smoothly, it also means you can rest assured that your bond will come from a reputable source.
Find a surety agency that only works with federally approved sureties when obtaining bonds, and make sure you do your due diligence by researching the surety agency beforehand. Keep in mind that not all sureties are “A” rated. Working with a reputable company will help guarantee assurance on your bonds.
Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.