BILL NUMBER: SB 896 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 10, 2005
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
require 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 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.
(a) For the purposes of this section, "private child support
collector" means a person, corporation, attorney, or other
nongovernmental entity who 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 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.
(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 10-point type, signed by the private
child support collector and the obligee. The contract shall be
delivered to the obligee in a paper form that the obligee may retain
for his or her records. The contract shall include all of the
following:
(1) An explanation of the fees imposed by contract and otherwise
permitted by law and an example of how they are calculated and
deducted.
(2) A statement that the amount of fees to be charged is set
by the agency and is not set by state law.
(3) An explanation of the nature of the
services to be provided.
(3)
(4) The expected duration of the contract, stated as a
length of time or as an amount to be collected by the collection
agency.
(4)
(5) An explanation of the opportunities available to
the obligee or private child support collector to cancel the contract
or other conditions under which the contract terminates.
(5)
(6) The mailing address, street address, telephone
numbers, facsimile numbers, and Internet address or location of the
private child support collector.
(6)
(7) 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)
(8) 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)
(9) 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 and is required by law to refund any fees
improperly retained .
(9)
(10) 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)
(11) 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)
(12) 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)"
(c) (1) An obligee shall have the right to cancel a contract with
a private support collector within 15 business days of the later of
signing the contract, 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.
(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.
(4) A private child support collector that improperly retains fees
from collections that are primarily attributable to the actions of a
government entity or to any other person or entity shall refund all
of those fees to the obligee immediately upon discovery or notice of
the improper retention of fees.
(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 that 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 paragraph 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.