Suzanne Simmonds was fed up. For 6 1/2 years, she had been unable to collect the child support her ex-boyfriend was legally required to pay. So in January 2001 she signed a contract with Child Support Network. She agreed to pay the Arizona company a $500 application fee and a 35% commission on any collections of the $3,800 owed to her daughter. After five months, the agency had pocketed $885, and Simmonds had received just $215. When she tried to get out of the contract, the company refused, ordered her to pay more than $1,800 for its efforts and sent her a scolding letter. "This is shameful conduct on your part and makes you no better than a non-custodial parent," said the letter. "Do you think those payments started coming through divine intervention? I think not."
As if deadbeat parents were not bad enough. Now aggravated spouses have a new gripe: profiteering companies that offer to help chase down the more than $89 billion in child-support payments that American parents have failed to make. Deadbeat bounty hunting is a small but growing field. There are at least 38 private businesses, up from a smattering a decade ago. The biggest of them, Supportkids, has 30,000 open cases and has collected more than $120 million from deadbeats since it was founded 11 years ago. But it has also kept $40 million for itself, which raises the question, Do companies like Supportkids profit children--or mainly themselves?
State agencies and nonprofit organizations have received hundreds of complaints in the past few years from clients who feel bilked. Some custodial parents don't realize how difficult the contracts are to cancel and find themselves paying exorbitant fees for services that aren't fully delivered. "We have all sorts of people who have gone to private agencies and feel ripped off and lied to," says Geraldine Jensen of the Association for Children for Enforcement of Support, whose members are low-income parents seeking child support. Channeling the collective anger, Charles Barr, a lawyer in Milwaukee, Wis., has filed a class action accusing Supportkids of misleading advertising and unconscionable contracts.
The bounty-hunting industry might not exist if the government were more competent. The state is supposed to collect child support free of charge. The welfare-reform act of 1996 tried to make the job easier by linking government databases and requiring firms to report new employees to child-support agencies. The Bush Administration made deadbeats an issue in July when it began arresting dozens of delinquent parents nationwide. But collection rates are still feeble. The amount of unpaid child support nearly doubled from 1996 to 2000, according to the latest available figures from the General Accounting Office, paving the way for more and more private firms to move in. "When a custodial parent comes to us, they have on average not been getting money for four years," says David Conder, president of the national association of private collection agencies. "We bring money into the household. Very rarely do we take it out."