SAN FRANCISCO, CA — Judge Susan Illston of the Northern District of California granted final approval of a $4.5 million class action settlement today on behalf of two proposed classes of California residents who cosigned bail bond premium financing agreements with Bail Hotline Bail Bonds (a/k/a DMCG, Inc.), but were not provided with a legally-required “Notice to Cosigner.”
In its order, the Court appointed Salahi PC and Edelson PC as Co-Lead Class Counsel, in recognition of the work their attorneys performed to secure the settlement. Yaman Salahi, founder of Salahi PC, has been litigating the case since 2022, including handling court hearings and settlement negotiations. The lawsuit is Abeyta v. DMCG, Inc., Case No. 3:22-cv-07089-SI (N.D. Cal.).
In the lawsuit, the plaintiff alleged that Bail Hotline failed to comply with California Civil Code Section 1799.91, which cosigners of a consumer credit contract to be provided with a “Notice to Cosigner” before they become obligated on the debt.
The plaintiff alleged Bail Hotline’s premium financing agreements were invalid and unenforceable against cosigners who weren’t provided the notice, and that Bail Hotline thus broke the law by taking their money and sending them collection letters.
The California Legislature adopted Section 1799.91 in the 1970s after observing that consumers often misunderstand what it means to cosign a debt. Many cosigners believe their signatures are just formalities to vouch for a friend or loved one’s good character. They don’t understand the legal implications of cosigning, including that they may be asked to pay the debt, have their wages garnished, or have it placed on a credit report, just as if they were the primary debtor. Given that problem, the Legislature required creditors to provide cosigners with the following notice explaining, in easy-to-understand language, the implications of becoming a cosigner:
In the lawsuit, the plaintiff alleged that he and other cosigners would not have cosigned or paid Bail Hotline if they had been given the Notice to Cosigner and understood that they were signing up to become indebted. He sought refunds of the amounts paid and statutory penalties for allegedly misleading and threatening collection letters.
The $4.5 million settlement represents approximately a 10% recovery of the total amount in controversy, and, if granted final approval, will be funded by Bail Hotline in five installments over the next four years.
The Court held a final approval hearing on May 2, 2025, and granted approval shortly thereafter. Payments are expected to start going out to Class Members in June 2025 and will continue for several years as Bail Hotline makes annual installment payments towards the settlement.
For more information, please visit the settlement website at www.bailhotlinesettlement.com, which is expected to be live within 14 days.