HD26 - The Need for the Regulation of Private Child Support Collection Firms

Executive Summary:
• House Joint Resolution 164 directed the Department of Social Services' Division of Child Support Enforcement (DCSE) and the Office of the Attorney General to study the need for regulation of private child support collection agencies.

• DCSE contracts with two private collection firms for selected cases and fee recoveries.

• Collection of child support is not covered by the federal Fair Debt Collections Practices Act. Private child support collection firms are not regulated by any state agency.

• There have not been widespread complaints registered with DCSE or other state agencies concerning private firms' practices.

• There have been a number of individual allegations of inappropriate child support collection business practices reported to DCSE offices and to General Assembly members, including the chief patron of this study.

• It appears to be in the interests of both customers and the Commonwealth to allow the use of private child support collection firms by customers who believe it will be advantageous to them.

• There is insufficient data at this time to suggest extensive regulation or oversight of the conduct of these firms.

• This study, therefore, recommends registration of all businesses engaged in child support collection services within the Commonwealth; issuance of approved child support collection guidelines which must be provided to all customers of the private collection firms; and a 24-month assessment of the nature and number of complaints concerning private child support enforcement practices, to be conducted by an agency or board. The agency or board will determine the ultimate need, if any, for regulation.