Regulation of surrogacy agencies is lacking

It was an awful experience.

The California surrogate agency brokering the deal mishandled the intended parents' money, and Scott went months without compensation. When checks did come, sometimes they bounced. Medical bills went unpaid.

Scott, who lives in Dallas, said she rarely heard from the agency — or the parents whose child she was carrying.

"It was one thing after another," she said. "I was pregnant with my surro daughter, and I couldn't get ahold of the agency owner. I swear she was screening my calls. I called around to a couple of other agencies to see what I could do, and, of course, I could do nothing."

Scott said she was shocked to learn that neither the state nor federal government regulates surrogate agencies. They do not have to be licensed, bonded or insured, and there are no rules governing how they handle money, screen surrogates or use egg donors. The only way to check them is through Internet message boards — or by word-of-mouth.

"It is more difficult to open a restaurant with a beer and wine license than it is to open a surrogacy agency," said Andy Vorzimer, a California reproductive-law attorney who specializes in fertility issues. "It is just astonishing."

The issue of whether surrogacy should be regulated has gained momentum in recent weeks after a class-action lawsuit was filed against a Colleyville, Texas, woman, Tonya Collins, and her California-based surrogate agency, Surrogenesis.

The suit alleges that $2.5 million paid by prospective parents is missing from an escrow account. Collins, 33, and Surro-genesis, along with the Michael Charles Independent Financial Holdings Group and business partner Jack Kiserow, are the subjects of the lawsuit, which was filed in April in California on behalf of 100 people.

The FBI and Postal Inspection Service are also investigating.

In response to the scandal and others, the American Bar Association's family law committee met recently and is drafting model legislation to provide the legal framework to regulate surrogacy agencies.

"We got together and said, 'We have to do something,' " recalled attorney Gregory Stern, legal director of Surrogacy Specialists of America, a Houston-based surrogacy agency. "This really does have to stop."

Lisa Ikemoto, a professor at the University of California- Davis School of Law who specializes in bioethics, health and reproductive law, said she favors regulation of the industry but is concerned that lawmakers could take it too far.

"We should focus on concerns about health and safety and preventing exploitation and protecting the needs and interest of the children and the parties involved," she said. "My concern is that it will switch and become about social morality."

No two states handle surrogacy the same.

In New York, surrogacy is illegal. Most states don't address it at all. Arizona law is unclear on the issue of surrogacy agreements.

Attorneys said Texas is actually one of the more progressive states because it has a statute governing surrogacy. But the law, they said, is very limited, applying only to married couples using gestational surrogacy — meaning the couple uses in vitro fertilization to create an embryo, which is then transferred to a surrogate woman who agrees to carry the couple's baby.

Vorzimer said states should require surrogacy agencies to be licensed, similar to adoption agencies. He said background checks should be conducted on agency owners and operators, and guidelines should be established for the operation of escrow accounts.

"There also needs to be a state agency to provide oversight and to serve as a repository for prospective parents to contact, akin to the Better Business Bureau," Vorzimer said. "There is no standardization or uniformity from agency to agency."

Vorzimer said states should regulate surrogates and egg donors, requiring them to undergo criminal background checks, drug screens, medical tests and psychological evaluations. They should also be required to have their own independent attorney and medical insurance, he said.

"I do not think any woman on any form of public assistance should be accepted as a surrogate or egg donor," Vorzimer said. "A woman who has never gone through the process of childbirth also should not be a surrogate."

After she gave birth to her surrogate child, Scott said she made it her mission to educate surrogates, prospective parents and egg donors about the process. Scott, married with three children, is now co-owner of the Dallas-based Simple Surrogacy agency. She is also a vocal proponent for industry regulation.

"There is nobody that stands over us and watches our every move, and there honestly should be," she said. "If you think about it, the ones on the up and up would be happy to do it. I would love to tell someone, 'I'm accredited. I'm licensed.' "