A South Bay-headquartered bail bonds company must forfeit $38 million in debt owed by thousands of people across California who allegedly signed misleading and exploitative contracts with the business over the past several years, according to a class-action settlement announced Thursday.

The accord with Bad Boys Bail Bonds — which was founded nearly 30 years ago in San Jose and now operates throughout the state, frequently airing local TV ads — marks an end to years of claims by people who said they were deceived into signing illegal contracts, then harassed for money that they never agreed to pay.

On Thursday, attorneys for those families hailed the agreement as “a victory for low-income families and communities of color who have been exploited by the bail bond industry.”

“For years, Bad Boys preyed on people at their most vulnerable, burying them in debt they never knowingly agreed to,” said Nisha Kashyap, program director for the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, in a statement announcing the settlement. She added that “the precedent set in this case will help protect countless families across California.”

The law firm claimed that Bad Boys often did not provide a co-signer notice while finalizing bail bonds contracts, meaning that anyone helping someone in jail could be left on the hook for the entire bail amount, according to the committee’s announcement. Such notices are legally required for those contracts.

As a result, the company must forfeit nearly $38 million in outstanding debt collected from more than 18,000 bail bonds contracts signed from 2017 through 2022, the law firm said.

One lawsuit against the company claimed an Alameda security guard was duped into a contract forcing her to pay $4,500. That’s despite the woman only showing up at the company’s Oakland office to pay a fraction of that amount, so that her friend could get out of jail.

A Bad Boys staffer allegedly told the woman that she would have to pay $1,000 to see her friend released, then lowered that amount to $500 in cash, on the condition that she sign some paperwork, according to the lawsuit.

Not once did the staffer tell the woman she’d be on the hook for the full bail bond premium, the lawsuit said, nor did the company give her a notice required under state law about her looming debt.

The harassing calls from Bad Boys began within weeks, the lawsuit claimed.

The company first phoned her “numerous times” over the next several months demanding money — so often that she had to get a new phone number — then dialed her mother more than once a day, according to the legal filing. Even when the woman blocked Bad Boys’ number, the company continued calling her from a disguised line, the lawsuit said.

At one point, a Bad Boy staffer told the security guard that she’d lose her job if she failed to pay up, the filing claimed. The company later filed a lawsuit against the woman, despite her debt being “unenforceable,” the lawsuit said.

“Bad Boys’ business model rests in large part on its noncompliance with California law,” her lawsuit said. “Bad Boys targets the family and friends of recent arrestees; it deceives them as to Bad Boys’ role in the bail bond process; and it convinces them to co-sign broad, legally unenforceable credit bail agreements.”

In addition to the payout announced Thursday, Bad Boys also must provide those notices in the future, and better train its staff members. The settlement also calls for a court-appointed monitor to ensure the company is hewing to the agreement.

“Our settlement ensures transparency, accountability and fairness where previously there was deception, harassment and exploitation,” said Niall Frizzell, an attorney with Keker, Van Nest & Peters, a firm that also represented people impacted by the bail bonds contracts.

A message left by the Bay Area News Group to reach Bad Boys Bail Bonds’ headquarters in San Jose was not returned.

The company has more than half a dozen offices across the state, including in San Jose, Oakland and Redwood City.

Jakob Rodgers is a senior breaking news reporter. Call, text or send him an encrypted message via Signal at 510-390-2351, or email him at jrodgers@bayareanewsgroup.com.