California Department of Insurance Investigation Leads to $5.5M Settlement

July 16, 2020

A settlement has been announced between Libre by Nexus Inc. in which it will cease transacting immigration bonds in the California, phase out the use of GPS ankle monitors, and issue credits to clients still in arrears with Libre.

Additionally, the company must provide individual cash credits of $420 to participants not owing any payments and voluntarily submit to oversight and inspection of its business practices by the California Department of Insurance. The total value of the settlement is roughly $5.5 million.

The CDI began an investigation into Libre and their affiliated licensed agents and surety companies following a “Request for Assistance” filed with the CDI by a relative of a previous Libre client. The investigation revealed that Libre had been transacting immigration bonds throughout California without being licensed by the CDI and targeted the Spanish-speaking community with contracts that were provided in English only.

The CDI says Libre has contracted with over 5,400 participants since 2014.

“Faced with the prospect of either detention or freedom, vulnerable immigrants trusted Libre by Nexus to explain contracts available only in English, with hidden and unclear costs, often believing that they were paying for their bond when, in fact, it only covered the GPS tracking device they were forced to wear,” Insurance Commissioner Ricardo Lara said in a statement. “Our action puts an end to Libre’s misleading business practices and makes amends to those who paid excessive and often unnecessary costs.”

With Libre as the only point of contact and directly involved with releasing clients from immigration detention centers, clients contracted with Libre for their services believing it was necessary and related to their immigration bonds. Many clients were under the impression they were paying off their immigration bonds, when they were actually contracting with Libre to pay for program fees unrelated to their bonds, according to the CDI.

Thus, many people were unknowingly indebted to Libre, entirely separate from the debt they owed towards their immigration bonds. Based on such investigative findings, the CDI issued a Cease and Desist Order against Libre on Dec. 11, 2019.

Libre issued a statement in response to the CDI announcement:

“Libre by Nexus is delighted that our company has successfully reached an agreement with the California Division of Insurance. Libre by Nexus aggressively defends itself from any accusations of wrongdoing by the division, and we are happy to put this process behind us.”

Under the terms of the settlement, Libre will cease and desist soliciting, selling, financing, and referring immigration bonds in California as well as submit to oversight and inspection of its business practices by the CDI.

The company will transition from a GPS device worn on the ankle to an app-based location system by Oct. 31. Terms of the settlement also dictate that Libre must ask all clients whether they prefer contracts to be in English or Spanish and to provide contracts in the language chosen by clients. Libre will also provide cash credits to program participants still in arrears and individual cash credits for those not in arrears, totaling $5.5 million.

Libre recently reached a similar settlement with the Attorney General in Washington state, and is currently under investigation in Virginia and New York.

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