BILL NUMBER: SB 896 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 28, 2005
INTRODUCED BY Senator Runner
FEBRUARY 22, 2005
An act to add Chapter 9 (commencing with Section 5610) to Part 5
of Division 9 of the Family Code, relating to child support.
LEGISLATIVE COUNSEL'S DIGEST
SB 896, as amended, Runner. Child support.
Existing law governs the collection of child support by local
child support agencies, or by means of a writ of execution, a notice
of levy, or earnings assignment order.
This bill would enact the Private Child Support Collection Act.
These provisions would regulate the activities of private child
support collectors, as defined. Among other things, the bill would
limit the child support that may be collected and the fees
that may be charged by a private child support collector,
require that entity a private child support
collector to provide specified notices and disclosures to the
child support obligee in a written contract and additional
information about child support payments during the term of the
contract, authorize the obligee to cancel any contract entered into
with that entity in certain circumstances, prescribe the rights of
the parties with respect to local child support
agencies and other governmental entities, and prescribe procedures
and remedies for enforcement of the provisions of the act.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 9 (commencing with Section 5610) is added to
Part 5 of Division 9 of the Family Code, to read:
CHAPTER 9. Private Child Support Collectors
5610.
This chapter shall be known and may be cited as the
"Private Child Support Collection Act."
5611.
For the purposes of this chapter:
(a) "Child support obligation" means an obligation for the payment
of financial support for a child under an order or writ issued by a
court or other tribunal.
(b) "Obligee" means the person identified in an order for child
support issued by a court or other tribunal as the payee to whom an
obligor's amounts of ordered child support are due.
(c) "Obligor" means the person identified in an order for child
support issued by a court or other tribunal as the individual
required to make payment under the terms of a support order for a
child.
(d) "Private
(a) For the purposes of this section,
"private child support collector" means an individual
or a person, corporation, attorney, or other
nongovernmental entity who engages in the enforcement of
is engaged by an obligee to collect child
support ordered by a court or other tribunal for a fee or other
consideration. The term does not include any of the
following:
(1) An attorney licensed to practice law in this state.
(2) A government agency of this or another state designated to
serve as a Title IV-D agency in accordance with Part D of Title IV of
the federal Social Security Act (42 U.S.C. Sec. 651 et seq.).
(3) A contractor
awarded a contract to engage in child support enforcement on behalf
of a governmental agency of this or another state that is authorized
by law to enforce a child support obligation. attorney
who addresses issues of ongoing child support or child support
arrearages in the course of an action to establish parentage or a
child support obligation, a proceeding under Division 10 (commencing
with Section 6200), a proceeding for dissolution of marriage, legal
separation, or nullity of marriage, or in post judgment or
modification proceedings related to any of those actions.
5612.
(b) Any contract for the collection of child support
between a private child support collector and an obligee shall be
written in simple language, in at least 12-point
10-point type, signed by the private child support
collector and the obligee and . The contract
shall be delivered to the obligee in a paper form that the obligee
may retain for his or her records. The contr act
shall include all of the following:
(a)
(1) An explanation of the fees imposed by contract
and otherwise permitted by law and an example of how they are
calculated and deducted.
(b)
(2) An explanation of the nature of the services to be
provided.
(c)
(3) The expected duration of the contract, stated as a
length of time or as an amount to be collected by the collection
agency.
(d)
(4) An explanation of the opportunities available to
the obligee or private child support collector to terminate
cancel the contract or other conditions under
which the contract terminates , including those specified in
Section 5613. .
(e)
(5) The mailing address, street address,
telephone numbers, facsimile numbers, and Internet address or
location of the private child support collector for the
purpose of communications between the collection agency and the
obligee or any authorized agent of the obligee.
(f) Statements substantially similar to the following:
(1) "This contract terminates under certain circumstances. You may
request termination of this contract at any time prior to midnight
of the 15th business day after the date you sign the contract. You
may also request termination of this contract under other
circumstances that are described in Section 5613 of the Family Code.
To request termination of this contract, mail a written, signed, and
dated notice stating why you want to terminate your contract to
__________ (name of the private child support collector) at
__________ (address of the private child support collector)."
(2) "This contract calls for us to collect money owed to you, and
not money owed to the county or state. If some of your child support
is owed to the county or state because you are receiving or have
received program benefits from CalWORKs or Temporary Assistance to
Needy Families, then we cannot collect that money for you. If you
start to receive program benefits from CalWORKs or Temporary
Assistance to Needy Families during this contract, you must tell us."
(3) "____________
(name of private child support collector) is not a governmental
entity and charges a fee for its services." support
collector.
(6) A statement that the private child support collector is not a
government entity and that government entities in California provide
child support collection and enforcement services free of charge.
(7) A statement that the private child support collector collects
only money owed to the obligee and not support assigned to the state
or county due to the receipt of CalWORKs or Temporary Assistance to
Needy Families.
(8) A statement that the private child support collector will not
retain fees from collections that are primarily attributable to the
actions of a government entity or any other person or entity.
(9) A statement that the obligee may continue to receive, or may
pursue, services through a government entity to collect support, and
the private child support collection agency will not require or
request that the obligee cease or refrain from engaging those
services.
(10) A notice the private child support collector is required to
keep and maintain case records for a period of four years and four
months, after the expiration of the contract and may thereafter
destroy or otherwise dispose of the records. The obligee may, prior
to destruction or disposal, retrieve those portions of the records
that are not confidential.
(11) A "Notice of Cancellation," which shall be included with the
contract and which shall contain, in the same size font as the
contract, the following statement, written in the same language as
the contract:
"Notice of Cancellation
You may cancel this contract, without any penalty or obligation,
within 15 business days from the date the contract is signed or you
receive this notice, whichever is later,
or_____________________________ (all other reasons for cancellation
permitted).
To cancel this contract, mail or deliver a signed copy of this
cancellation notice or any other written notice to
______________________(name of private child support collector) at
____________________________________________ (address for mail or
delivery) no later than midnight on ______________(date).
I am canceling this contract.______________(date)
________________________(signature)"
5613.
(c) (1) An obligee
may, by written demand, terminate shall have
the right to cancel a contract with a private support collector
in any of the following circumstances:
(a) Within
within 15 business days of the later of
signing the contract .
(b) After any 12 consecutive months in which the private child
support collector fails to make a collection.
(c) Any time a state or local Title IV-D agency begins collecting
on behalf of the obligee, provided those collections are completely
independent of the private child support collector's involvement in
the case.
(d) If
, or receiving a blank notice of cancellation form,
or at any time if the private child support collector commits a
material breach of any provision of the contract or a material
violation of any provision of this chapter with respect to the
obligee or the obligor .
(e) For any other reason specified in the contract.
5614.
A contract with a private child support collector shall terminate
automatically when the contract term has expired or the contract
amount has been collected.
5615.
An obligee shall owe no fees after termination of a contract with
a private child support collector, except a private child support
collector may charge and collect its fee on child support collected
after the termination of a contract if the payment is made to
discharge, in whole or in part, a lien filed by the private child
support collector prior to the termination of the contract.
5616.
A private child support collector shall not enter into a payment
agreement with an obligor that forgives or that compromises, in whole
or in part, arrearages owed to the obligee without the written
consent of the obligee.
5617.
A private child support collector shall not impose a fee or charge
for any child support payments collected solely through the efforts
of other persons or entities, and any fees retained shall be promptly
refunded to the obligee upon proof that other persons or entities
were solely responsible for the collection.
5618.
A private child support collector providing services to an obligee
that has, or has had, a case pursuant to Part D of Title IV of the
federal Social Security Act with a county child support agency shall
provide notice of the contract to the county child support agency.
(a) If the notice includes a power of attorney signed by the
obligee requesting the county child support agency to change the
payment address to that of the private child support collector, the
county shall honor the request for change of address, provided
nothing shall prevent the obligee from revoking the change of address
at any time.
(b) If the notice includes a power of attorney signed by the
obligee authorizing the county child support agency to release
payment records to the private child support collector, the county
child support agency shall release those records, including
information regarding amounts assigned to the county or state.
(c) A private child support collector who incorrectly states the
amount of child support to be collected is not in violation of this
chapter if the private child support collector has not received
payment records from the state or county child support enforcement
agency pursuant to this section.
(d) A private child support collector is not in violation of this
chapter if it collects any amount assigned to the county or state if
the private child support collector has not received payment records
from the state or county child support enforcement agency pursuant to
this section, provided the private child support collector complies
with subdivision (c) of Section 5619.
5619.
(a) A private child support collector shall not collect support
assigned to the county or state pursuant to Section 11477 of the
Welfare and Institutions Code, or to any other state.
(b) If funds contracted to be collected by the private child
support collector are subject to an assignment to the county or
state, the contract shall be suspended to the extent of the amount
subject to the assignment or in its entirety if the amount assigned
equals or exceeds the amount to be collected pursuant to the
contract.
(c) A private child support collector who receives notice that
child support has been assigned to the county or state shall, upon
receipt of the notice, cease any further collection activities
related to the assigned support and shall pay over to the assignee
any moneys subject to the assignment, including any fees collected on
those moneys that are collected after that notice and that are in
the possession or control of the private child support collector.
5620.
A private child support collector representing an obligee with an
open case pursuant to Part D of Title IV of the federal Social
Security Act shall ensure that all payments made on behalf of the
obligor are directed to the county child support registry or state
disbursement unit.
5621.
(a) A private child support collector shall maintain records of
all child support collections made on behalf of, and disbursed to, a
client who is an obligee, including:
(1) The name of, and other identifying information relating to,
any obligor who made child support payments collected by the private
child support collector.
(2) The amount of support collected by the private child support
collector for the obligee.
(3) The date on which each amount was collected.
(4) The date on which each amount due the obligee was sent to the
obligee.
(5) The amount of the payment sent to the obligee.
(6) A copy of the order establishing the child support obligation
under which a collection was made by the private child support
collector.
(7) Records of all correspondence between the private child
support collector and an obligee and obligor in a case.
(8) Any other pertinent information relating to the child support
obligation, including any case, cause, or docket number of the court
having jurisdiction over the matter and official government payment
records obtained by the private child support collector on behalf of,
and at the request of, the obligee.
(b) The records required under this section shall be maintained by
the private child support collector for a period of four years from
the date of the last child support payment collected by the private
child support collector on behalf of an obligee.
(c) A private child support collector shall safeguard case records
in a manner reasonably expected to prevent intentional or accidental
disclosure of confidential information pertaining to the obligee or
obligor, including providing necessary protections for records
maintained in an automated system.
(d) A private child support collector shall timely inform clients
of all legal orders, hearings, and notices intended for the client
that have been sent to the private child support collector by a
government child support enforcement agency.
(e) A private child support collector shall provide to an obligee,
via telephone or secure Internet access, or by mail at the obligee's
request, the information maintained pursuant to paragraphs (1) to
(5), inclusive, of subdivision (a).
5622.
A private child support collector shall not collect or attempt to
collect child support by means of any of the following conduct:
(a) Using, or threatening to use, physical force or violence or
any criminal means to cause harm to the person, the reputation, or
the property of any person.
(b) Threatening that the failure to pay a child support obligation
will result in an accusation that the obligor has committed a crime
where the accusation, if made, would be false.
(c) Communicating, or threatening to communicate, to any person
the fact that an obligor has engaged in conduct, other than the
failure to pay a child support obligation, which the private child
support collector knows or has reason to believe will defame the
obligor.
(d) Threatening to any person that nonpayment of the child support
obligation may result in the arrest of the obligor or the seizure,
garnishment, attachment, or sale of any property or the garnishment
or attachment of wages of the obligor, unless that action is in fact
permitted by the law.
(e) Threatening to take any action against the obligor which the
private child support collector has no authority to take.
(f) Using obscene or profane language.
(g) Placing telephone calls without disclosing the identity of the
private child support collector.
(h) Causing expense to any person for long distance telephone
calls, telegram fees, or charges for other similar communications, by
misrepresenting to that person the purpose of a telephone call,
telegram, or similar communication.
(i) Causing a telephone to ring repeatedly or continuously to
annoy the person called.
(j) Communicating, by telephone or in person, with the obligor
with a frequency that is unreasonable and constitutes harassment to
the obligor under the circumstances.
(k) Communicating with the obligor's employer regarding the
obligor's child support obligation unless such a communication is
necessary to the collection of the obligation, or unless the obligor
or his attorney has consented in writing to such communication. A
communication is necessary to the collection of the obligation only
if it is made for the purposes of verifying the obligor's employment,
locating the obligor, or effecting garnishment of the obligor's
wages.
(l) Falsely representing that any person is an attorney or
counselor at law.
(m) Falsely representing that any private child support collector
is vouched for, bonded by, affiliated with, or is an instrumentality,
agent, or official of any federal, state, or local government or any
agency of federal, state, or local government.
(n) Falsely representing that a private child support collector is
a consumer reporting agency or falsely representing that information
concerning an obligor's failure or alleged failure to pay a child
support obligation has been, or is about to be, referred to a
consumer reporting agency.
(o) Initiating communications, other than statements of account,
with the obligor with regard to the obligation, when the private
child support collector has been previously notified in writing by
the obligor's attorney that the obligor is represented by that
attorney with respect to the obligation and the notice includes the
attorney's name and address and a request by the attorney that all
communications regarding the child support obligation be addressed to
that attorney, unless the attorney fails to answer correspondence,
return telephone calls, or discuss the obligation in question. This
subdivision does not apply if prior approval has been obtained from
the obligor's attorney, or if the communication is a response in the
ordinary course of business to an obligor's inquiry.
5623.
(a) In addition to any other remedy provided by this chapter, a
person may bring an action for any of the following:
(1) Injunctive relief to enjoin or restrain a violation of this
chapter.
(2) Actual damages incurred as a result of a violation of this
chapter.
(b) A person who prevails in an action brought pursuant to this
section is entitled to recover court costs and reasonable attorney's
fees.
(c) On a finding by a court that an action pursuant to this
section was brought in bad faith or for purposes of harassment, the
court shall award the defendant attorney's fees reasonably related to
the work performed and costs.
5624.
(a) A violation of this chapter is a deceptive trade practice
under the laws of this state and is actionable under those laws.
(b) This chapter does not affect or alter a remedy at law or in
equity otherwise available to an obligor, obligee, governmental
entity, or other legal entity.
(c) A private child support collector does not violate this
chapter if the action complained of resulted from a bona fide error
that occurred notwithstanding the use of reasonable procedures to
avoid the error.
(2) A contract shall automatically terminate when the contract
term has expired or the contract amount has been collected, whichever
occurs sooner.
(3) No private child support collector shall take an assignment
of the support obligation.
(d) (1) A private child support collector shall provide to an
obligee all of the following information:
(A) The name of, and other identifying information relating to,
any obligor who made child support payments collected by the private
child support collector.
(B) The amount of support collected by the private child support
collector.
(C) The date on which each amount was received by the private
child support collector.
(D) The date on which each amount received by the private child
support collector was sent to the obligee.
(E) The amount of the payment sent to the obligee.
(F) The source of payment of support collected and the actions
affirmatively taken by the private child support collector that
resulted in the payment.
(G) The amount and percentage of each payment kept by the private
child support collector as its fee.
(2) The information required by paragraph (1) shall either be made
available by mail, telephone, or via secure Internet access. If
provided by mail, the notice shall be sent at least quarterly.
Information accessed by telephone and the Internet shall be up to
date.
(e) (1) A private child support collector shall maintain records
of all child support collections made on behalf of a client who is an
obligee. The records required under this section shall be maintained
by the private child support collector for the duration of the
contract plus for a period of four years and four months from the
date of the last child support payment collected by the private child
support collector on behalf of an obligee. In addition to
information required by subdivision (d), the private child support
collector shall maintain the following:
(A) A copy of the order establishing the child support obligation
under which a collection was made by the private child support
collector.
(B) Records of all correspondence between the private child
support collector and the obligee or obligor in a case.
(C) Any other pertinent information relating to the child support
obligation, including any case, cause, or docket number of the court
having jurisdiction over the matter and official government payment
records obtained by the private child support collector on behalf of,
and at the request of, the obligee.
(2) A private child support collector shall safeguard case records
in a manner reasonably expected to prevent intentional or accidental
disclosure of confidential information pertaining to the obligee or
obligor, including providing necessary protections for records
maintained in an automated system.
(3) Every person who contracts with a private child support
collector shall have the right to review all files and documents,
both paper and electronic, in the possession of the private child
support collector regarding that obligee's case that are not required
by law to be kept confidential. The obligee, during regular business
hours, shall be provided reasonable access to and copies of the
files and records of the private child support collector regarding
all moneys received, collection attempts made, fees retained or paid
to the private child support collector, and moneys disbursed to the
obligee. The private child support collector may not charge a fee for
access to the files and records, but may require the obligee to pay
up to three cents ($.03) per page for the copies prior to their
release.
(f) A private child support collector shall not do any of the
following:
(1) Collect or attempt to collect child support by means of any
conduct which is prohibited of a debt collector collecting a consumer
debt under Sections 1788.10 to 1788.16, inclusive, of the Civil
Code.
(2) Misstate the amount of the fee that may be lawfully paid the
private child support collector for the performance of the contract
or the identity of the person who is obligated to pay that fee.
(3)
Make a false representation of the amount of child support to be
collected. A private child support collector is not in violation of
this provision if it reasonably relied on evidence provided by the
government entity collecting child support, a court with jurisdiction
over the support obligation, or from the obligee, or upon proof
provided by the obligor.
(4) Ask any party other than the obligor to pay the child support
obligation, unless that party is legally responsible for the
obligation or is the legal representative of the obligor.
(g) (1) A person may bring an action for actual damages incurred
as a result of a violation of this section.
(2) In addition to actual damages, a private child support
collector who willfully and knowingly violates the provisions of this
section shall be liable for a civil penalty in an amount determined
by the court, which may not be less than one hundred dollars ($100)
nor more than one thousand dollars ($1,000).
(3) A person who prevails in an action brought pursuant to this
section is entitled to recover court costs. Reasonable attorney's
fees shall be awarded to a prevailing obligee or obligor. On a
finding by a court that an action pursuant to this section was
brought by an obligee or obligor in bad faith or for purposes of
harassment, the court shall award the private child support collector
attorney's fees reasonably related to the work performed and costs.
(4) A private child support collector is not in violation of this
section if the private child support collector shows, by a
preponderance of the evidence, that the action complained of was not
intentional and resulted from a bona fide error that occurred
notwithstanding the use of reasonable procedures to avoid the error.
(5) The remedies provided in this subdivision are cumulative and
are in addition to any other procedures, rights, or remedies
available under other provision of the law.
(h) Any waiver of the rights, requirements, and remedies provided
by this section violates public policy and is void.