Things to Consider Before Choosing an Egg Donor or Surrogacy Agency

by Darlene M. Pinkerton

Today, there are many egg donation and gestational surrogacy agencies to choose from, and while many egg donor and surrogacy agencies have been in business for a long time, and deserve respect for the excellent, quality services they provide, some donor and surrogacy agencies are very new, have no qualifications, and provide poor service. Some agencies have committed crimes against their clients by stealing money given directly to the agency, so every intended parent should insist that all their funds are held in an attorney trust or fully licensed escrow company.  Every intended parent needs to understand if their money is in a protected account or in the hands of the person running the agency.  If an agency holds funds, and uses those funds fradulently, intended parents, and their donor/surrogate may be vulnerable and left without any money for payments and no possibility of recourse. Please thoroughly investigate an agency before committing to their surrogacy or egg donation program, before signing their retainer, and definitely before sending them your money.   The State of California has a law that states all client funds related to egg donation or surrogacy must be held in an attorney-client trust account, or an account through a licensed escrow company.  It is against the law for any CA agency to hold client funds and if your agency is asking to hold funds you should be aware that they are breaking the law!

Here are some other guidelines:

1. Experience – How long has the agency been in business?
   Assisted Reproductive Technology or “ART” (Egg donation/surrogacy) is a relatively new infertility treatment (first case in 1984 with a family member and 1988 for a non-family member). This means that an agency’s experience in providing ART services is necessarily limited by time. The majority of reputable egg donation and surrogacy agencies have been in business for five to 25 years. Few agencies have ten or more years of matching and coordination experience, and only a couple have twenty or more years experience. While young, upstart companies may also be trustworthy, many of the newer agencies do not have the years in business to show adequate experience in dealing with their clients in a fair and ethical manner. A short time in business may also mean that an agency does not have the experience to provide the expert coordination and agency services you should expect. It is important that you understand the level of expertise each agency has in coordinating egg donor and surrogacy cycles, and you should ask how many cycles they have actually coordinated in their years in business. The more egg donor and surrogacy cycles an agency coordinates, the more likely they are to have gained a solid reputation and the valuable experience needed to work through difficult situations that sometimes arise during a cycle. In most cases your egg donation or surrogacy cycle will go very smoothly, but you should make sure you are working with someone who is very knowledgeable in the field. Ask for references. Specifically ask for three or more physician references.  And remember, it is true that you sometimes get what you pay for.  A low priced agency is probably not providing much service and you may be left with little support throughout the donor or surrogacy cycle.
2. Financial Stability – Does the agency have a professional business location, employees, errors and ommissions insurance?
   In this day and age of internet, any person can give the impression that they are professional and have been doing business for a long time when, in fact, they are simply good at promoting themselves through social media.  When choosing an egg donor and/or surrogacy agency you should determine whether it is important to you that your agency has an actual professional office or if you are comfortable working with an agency working out of a home office. Many small agencies are started by a surrogate mother who has experience as a surrogate, but not as an agency. She will have a sincere desire to “help others,” but she will generally only work from home to save money or so she can be home with her children. While this doesn’t mean she won’t work hard to provide good service, her lack of a business location could mean the agency does not coordinate enough cases per year to provide them with the financial stability to maintain an office, pay for employees, insurance, and all the other expenses that come with having a professional presence. Further, a lack of a business presence will generally mean the agency does not hold normal business hours (9-5). This means a “live person” may not be available to handle calls from you, your donor, surrogate or IVF center in a timely manner. The coordinator’s availability throughout working hours is critical during your egg donation or surrogacy cycle when/if issues arise that require immediate attention.
3. Office Location – Reasons why you should visit the agency’s business location:
   Whether you choose an agency that has a professional office location or you choose an agency that works from home, you should meet in person with the agency at their work environment rather than at a restaurant or coffee shop. Each agency has its own “culture and feel” and by visiting their facilities you can gain a better understanding of what they are like: Is the agency very structured and businesslike? Or, is it relaxed and comfortable? Not every client wants or needs the same culture, but it is important you find the agency that fits your personality and circumstances. 

   If an agency does not have a professional office you should ask to meet at their home. It is important to see a home office so you can see how well organized their business space is. If they provide a separate and well-organized working space for their home business, they will most likely treat their home business very seriously and show that same level of care for your case even if they are a small agency. If an agency is not willing to let you visit them at their home office, this should raise a number of questions as to why they wouldn’t want you to be there. Can the owner provide full time service, or can she only manage to work part-time due to her other responsibilities – such as raising young children? If she only works part-time, she could become easily distracted from work (your cycle) throughout the day while taking the children to/from school and to/from activities. The availability of your agency and coordinator throughout normal business hours can make the difference in the success of your cycle.

   It is easy these days to project an internet business image that is far from accurate. Several agencies list an address on a website and their letterhead, but the agency doesn’t actually have a physical office within that building or even at that location.   Many small agencies use the business address for a Postal Annex, Postal Junction, The Box Office, or other “business presence” company, which gives the impression they have an actual business office when they don’t have an office at all. Recently, an agency suspected of stealing trust money from their clients had a long list of “office locations” in multiple states posted on their website. Some of these “offices” were even listed in other countries. The agency’s internet presence made it appear that it was a very successful U.S. and international company, but it actually only had one physical office. After the clients’ money disappeared, however, and people either went to the addresses provided, or they viewed them from www.GoogleEarth.com or www.zillow.com, they discovered the “phantom addresses.” This agency also did what a number of small agencies do…they publicized a legitimate business street address, but it was the address of a Company that specializes in giving companies the “appearance” of having an actual physical office.  When people tried to find the physical office or view the actual building through one of the above methods, what they found were these companies, and not their agency. In the case of the agency that stole client money, their clients/donors/surrogates believed they were dealing with a professional company that had professional offices, and they believed they could just go to that posted address and find someone who could answer their questions and help them get their money. They were shocked to find out that the address was a sham. If an agency is choosing to make themselves appear to be something they aren’t, it could be a strong indicator that the agency will also not be completely forthright in their dealings with you throughout the cycle. Whenever possible, you should go to the physical location listed or at the very least do an internet search and “look” at the office space of the agency. If the business location isn’t what the agency is portraying to you do not work with that agency. The more informed you are about the people you are working with, the less likely it is that you will be taken advantage of by any agency.

4. Professional Company vs. Home Office – Does the agency hold normal business hours and have employees?
   If the owner of an agency works out of their home, or does not have full-time employees, you may not be able to reach a “live person” during normal business hours should the need arise. Larger agencies have full-time employees in the office during normal business hours, which means you are always able to reach a “live person” who can help you immediately. This is really important once you are in cycle because there are often times when an IVF center will call with a sudden change in protocol, medications, appointments, etc. and it is important they reach someone immediately. The lack of immediate contact could leave you, your IVF center, and your donor/surrogate vulnerable to time sensitive problems in the cycle. 

   If the majority of your calls go directly to a voicemail during normal business hours, or you are asked to call a cell phone number during normal business hours, this could be an indication that the agency consists of either one person, or a limited number of part-time people who are unavailable to answer the phone during normal business hours.   While having your coordinator’s cell phone number is important so they can be reached on weekends and after hours in case of an urgent matter, if you are only given a cell number as the primary method of communication during normal business hours you should be concerned. Many very small agencies will give you cell number and claim they are available 24 hours a day, which sounds good initially, but they will often be unavailable to immediately answer your call even during normal business hours. Make sure you also have a complete understanding of how your case will be handled if you are working with a one-person office.  What happens if the person coordinating your cycle is unreachable, becomes ill or goes on vacation?  In order to protect yourself, make sure you ask for the phone number of a secondary person whom you can contact directly, and who will help manage your cycle should the primary coordinator be unavailable. If the agency can’t or won’t provide you with the number of an experienced coordinator as a “back up” person, then you need to decide if you are comfortable in that situation.

5. Errors and Omissions Insurance – Does the agency have it, and has the agency been involved in any lawsuits?
   Professional agencies will usually carry errors and omissions insurance for their business. This type of insurance is meant to cover the company in the event of gross negligence on the part of the agency. This is a very expensive insurance (usually in excess of $10,000 per year), but it does provide a client with the knowledge and comfort that there is coverage should the agency commit gross negligence and cause harm to the client. Smaller agencies can’t usually afford this insurance, leaving their clients vulnerable should a serious error or omission occur during a cycle. You should ask your agency for a copy of the “declarations page of their E&O insurance.” If they can’t or won’t provide proof of insurance, then you will need to decide whether or not you are comfortable with that agency. 

   You should also ask if the agency has been involved in any lawsuits. Every application for E&O insurance will ask for specific information on lawsuit history. The E&O insurance company may not accept a company that has a history of lawsuits, so the lack of E&O insurance may not be because they can’t afford to pay for insurance; rather it could be that they were rejected by the insurance companies. You may also do a litigation search, as many disputes between agency and client will not end up as an E&O claim, but may surface in a Small Claims, Municipal Court or Superior Court action. These are public record, if you care to go online to search. One of the areas in which a client is most vulnerable, however,  is when the agency holds the client’s funds in trust for future payment to surrogate or egg donor.

6. Client Funds – Who holds the funds for the donor/surrogacy cycle?
   Unfortunately, there have been far too many incidences over the past few years in which an agency suddenly closes its doors and takes the client’s trust fund money. When checks begin bouncing, a company suddenly stops answering calls, or closes their doors, historically this has meant that client money is gone…yet the client is still responsible to pay the donor and/or surrogate. You may be left with little recourse for recovering your money. An intended parent should make sure they completely understand how their money will be handled by the agency, as well as how they can be protected should an agency suddenly close the bank account or close their business. In the State of California it is illegal for any agency to hold a clients funds.  They may only receive the agency fee directly from the clients and all funds for the cycle must be deposited to an attorney-client trust account, or a licensed escrow company. What is the best way for a client to protect their funds? DO NOT ALLOW AN AGENCY TO HOLD YOUR MONEY FOR THE CYCLE!

Attorney-Client Trust Account:  In order to avoid the possible misuse of your funds, ask to deposit your funds directly into a trust account held by an attorney. An attorney trust accounts is regulated by the State Bar of the State in which the attorney practices. The accounts are regulated by the State, and the attorney is accountable to the State Bar for every penny held in trust. The attorney can be disciplined for the slightest oversight, including the suspension or loss of the attorney’s license to practice law. The interest earned on the account goes to the State Bar in which they practice, so they are not gaining interest on the funds they hold, and there is no financial advantage to holding your funds for longer than necessary. The State Bar also mandates the type of bank in which the funds can be held, the amount of insurance that must be provided by the bank, and that bank is responsible for sending the interest directly to the State Bar. The law firm will generally charge a one–time fee for donor and/or surrogate trust management, plus a “per check or invoice fee” for a surrogacy cycle.

The next safest option for your money would be to deposit it directly into the account of a reputable Escrow company. Don’t be confused by someone saying your money will be held “in escrow” vs. having your money actually held by a licensed Escrow company. In order for a company to be licensed as an escrow company in California, they have to prove they have 5 years of actual escrow experience, (which means they have probably worked for a reputable company or bank in their escrow department), demonstrate a minimum level of financial strength (in CA they must have $50,000 in liquid assets), submit to a background check by the state, purchase one or more Bonds (to cover such things a misappropriation of trust funds), and go through an application process, etc. You should ask for the escrow company’s license and proof of Bonding, as well as asking how long it has worked in providing escrow functions for egg donation and/or surrogacy cases…not just how many years they have functioned as a licensed escrow office. You should also ask about the type and frequency of statements you will receive.

Remeber, it is illegal in the State of California for any agency to hold client funds regardless of size or how long they’ve been in business. Some large and reputable agencies do hold client funds, but remember if that company is in CA it is still illegal for them to do so.  If you choose to work with an agency that holds client funds make sure they at least provide proof of insurance and bonding. Bonding generally does not cover the full amount of funds that would be required for a donor and surrogacy cycle, so there is no guarantee the full amount of your deposit is safe, but it will show that they have taken the steps to put a system in place that protects your money. Make sure to ask about the maximum amount of money the bonding or insurance covers, so you know that you are covered for the amount of money you are required to deposit into their account. If an agency isn’t insured and bonded DON”T let them hold your funds. Attorneys and escrow companies work well with agencies, so there is never any legitimate reason why an agency should have direct access to your money. A recent scam was with an agency (SurroGenesis) that insisted all the funds be deposited to a “holding company” that was not an escrow company. Now millions of client dollars are missing. The owner of the agency is suspected of being the undisclosed owner of the holding company, and she had full check writing privileges on the accounts. Story from the LA Times There are currently stories about an ageny in Texas and an agency in Idaho that also took client funds.  Protect yourself and your money.

A special note to international families: You should be especially concerned about where your funds are deposited. It will be far more costly for you to attempt the recovery of your funds because the legal action would have to take place in the State in which the agency has its business address.  Some agencies have their international clients deposit money into the agency’s account rather than an attorney trust account or escrow company, but do not require the same of their U.S. clients. There is no reason for treating international clients differently than U.S. clients. If the agency tells you this is their policy, you should ask them to explain why they choose to hold funds from their international clients. If they say it is because their escrow company can’t receive international wires, etc, then insist that you use an attorney to hold the funds for your cycle.

Your egg donation and surrogacy journey will be full of emotions and concerns, but you can alleviate some of those concerns by investigating your agency very carefully and understanding how they operate on a daily basis and how your funds will be handled. Don’t be afraid to ask questions because you are concerned the agency will get upset or not match you with a surrogate or donor. The reputable agencies are very willing to discuss their programs and provide answers to your all your questions.

We wish you the greatest success during your egg donation/surrogacy journey.