Five years ago, Stephanie Scott agreed to be a surrogate mother for an infertile couple on the East Coast.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 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 Surrogenesis, along with the Michael Charles Independent Financial Holdings Group and 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,’ ” said 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 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.”

A limited statute

No two states handle surrogacy the same.

In New York, surrogacy is illegal. Most states don’t address it at all.

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.

In these cases, the contract between the parties is approved by a judge who orders the hospital to put the couple’s name on the birth certificate when the baby is born.

Texas’ statute does not address traditional surrogacy, when a surrogate mother is artificially inseminated with the intended father’s sperm. It also does not address single parents or gay partners using surrogates.

When a baby is born under these circumstances, attorneys said, the party that is not genetically linked to the child usually has to adopt the baby, as if they were a step-parent.

“It is not protected by the law, so there is a major legal risk,” said Dallas attorney Lauren Gaydos Duffer, who specializes in assisted reproductive technology law.

And while Texas outlines the responsibilities of the surrogate and married parents, it says nothing about the operation of surrogate agencies or what criteria should be used to select surrogate mothers and egg donors.

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 perspective parents to contact, akin to the Better Business Bureau,” Vorzimer said. “There is no standardization or uniformity from agency to agency.”

Vorzimer also says 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.”

Lots on the line

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, who is married with three children, is now co-owner of a Dallas-based surrogate agency, Simple Surrogacy. 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.’ ”

Scott said her agency conducts criminal background checks and psychological evaluations on all prospective egg donors and surrogates.

They also drug-test the women and draw up contracts allowing intended parents to test their surrogates whenever they want.

“We want to make sure they are responsible and are not going to wind up in jail or hurt the unborn child,” Scott said.

Scott said her agency receives about 50 applications a week from potential surrogates, who can make up to $30,000 for carrying another person’s child.

Scott said only about 10 make it through their initial screening process.

“A couple of years ago, I got a profile for a surrogate in North Carolina, and there was a list of things she had done, from drug possession and on and on,” Scott said. “I turned her down, and I found out that another agency was advertising her. I ended up calling them and saying, ‘Did you do a criminal background check?’ They told me to mind my own business.”

Frisco residents Linda and Danny Smith turned to Scott’s agency last year after several failed attempts at pregnancy. “I waited too long, and we went through several years of fertility treatments and drugs and it never worked,” said Linda Smith, 46.

Smith said they selected their surrogate — as well as an egg donor — after reviewing profiles, pictures, medical history and other information provided by Scott and her agency.

Using in vitro fertilization, Smith said her husband’s sperm fertilized eggs from the egg donor, who wished to remain anonymous. An embryo was then implanted into their surrogate, a woman Smith has gotten to know well.

Smith said she talks to her surrogate often and goes with her to doctor’s appointments. She will be with her in the delivery room. And while things are going well with Smith and her surrogate, Smith said she definitely supports regulation of the industry, where hearts and money are on the line.

“It is a big deal,” said Smith, who estimates they will spend $70,000 to $80,000. “It is very expensive, not only financially but emotionally.

“This is a life we are talking about.”