DUNNING DEADBEATS

By DAVID VAN BIEMA

AL JAMES, OF A COMPANY CALLED CHILD Support Enforcement, is working the phone. He's got the mother of a perp on the line, and he's reeling her in. "We' ve been trying to reach your son since August without any response to letters or messages." James is a former repo man; he plays it polite but inexorable. "Do you know who he is working for?" Pause. "Does he understand that Texas has passed criminal-nonsupport statutes?" Pause. "Do you think he may be afraid to call? That if he calls he will go to jail? Tell him I will work with him in any way I can to help him straighten this out." Final pause. "But if I find out where he' s working and he hasn' t called, I won't give him the courtesy of a phone call. l'll attach his wages." James hangs up. He's good: people he wants to pay up, usually pay up. That makes their ex-wives and their children happy.

If the '90s offer one villain by consensus, it is the deadbeat dad, that selfish fugitive condemned by liberals and conservatives alike for his irresponsible behavior and generous contributions to the cycle of welfare dependency. The Clinton Administration has taken aim at him (or her- around 5% of the deadbeats are moms), opening up the military's personnel files to collection efforts and pushing a national registry of parents' obligations. It also championed provisions, which passed the House of Representatives last week, that require states to revoke driving and professional licenses for nonpayment and apply property liens across state lines. At week's end Florida rounded up several hundred suspected deadbeats in a dramatic sweep. Though state and federal collection efforts, including a program to confiscate federal tax refunds, have had some success, the scope of the scofflaws' damage is still vast--they owe a cumulative $34 billion to 17 million children.

It was only a matter of time before that kind of money attracted bounty hunters. In fact, this burgeoning line of business has exploded in recent years. Before 1988 there were no firms whose sole purpose was collecting child support; today there are an estimated 150. The print ad for one of the largest, Find Dad, Inc., in California, is only slightly slicker than most: "He's enjoying his second childhood. Your kids are having trouble getting through their first." For 27% of any recovered money, Find Dad promises to do just that.

The only odd thing about this mushrooming industry is that its service is one supposedly performed by state agencies--for free. In 1993 $1.5 billion in federal funds flowed through the Department of Health and Human Services to 54 local agencies charged with hunting down welshers. Though the state programs corralled a lot of shirkers, they are nowhere near keeping up with demand. Texas is typical: it is now handling more than 800,000 cases, making recoveries in only 18% of them.

The Texas haul is also made up of money mostly owed to welfare mothers. The joint state/federal enforcement program was originally founded, in part, to defray the costs of Aid to Families with Dependent Children, and the states can still use the money they collect in welfare cases for that purpose. Funds recovered on behalf of nonwelfare mothers, however, simply get passed on to them. The result, says Sue Anderson, a Minnesotan who spent years trying to collect from her ex, is "if you have any sort of income, [the states] don't give you the time of day." Some 7.5 million women nationwide share her frustration.

That's a sizable market niche. Says Casey Hoffman, who ran Texas' child-support collection program from 1986 to 1990: "At some point, I realized that the private sector was going to have to come into play." So Hoffman jumped the fence and in 1991 founded Child Support Enforcement; today his firm employs eight full-time investigators on some 3,000 cases. Hoffman's backround as a high public official is unusual; the business runs more to seasoned debt collectors such as Find Dad's Mel Shaw, who will say, straight-faced, of a projected quarry, "I' m his worst nightmare. I'll be on him like a new coat of paint." They employ standard investigative techniques, but once they find their man, they have more resources than the average bill collector. Armed with a court order, investigators can often convince authorities to garnish wages, attach bank accounts or even foreclose on real estate. The provisions passed by the House last week could "give us additional tools to work with,'' Hoffman says. Sometimes the collectors simply shame the deadbeat, plastering his neighborhood with wanted posters or--in a case near Fort Worth--posting his name on a highway billboard. The ultimate threat is jail time.

Most of the private collection firms claim a recovery rate of more than 60%, but there is a downside. Ads in magazines such as Income Plus that shout MAKE A FORTUNE COLLECTING PAST-DUE CHILD SUPPORT FROM DEADBEAT PARENTS have drawn their share of fools and charlatans to a business that is thus far unregulated under laws such as the Fair Debt Collection Practices Act. Ron Dusek, a spokesman for the Texas Attorney General's office, warns that some companies have misrepresented themselves, or swallowed up-front fees and then done nothing. Agrees Wayne Doss, director of Los Angeles County's Bureau of Family Support Operations: "There are people without the appropriate backgrounds playing dice with other people's money." Debbie Kline, of the independent Association for Children for Enforcement of Support (aces), calls the private agencies "vultures." And aces president Geraldine Jensen suggests that anyone who can afford to pay 30% of their support in fees could hire a lawyer: "At least then you can go to the bar association and complain. Here, you've got no recourse."

Yet women often have trouble finding a lawyer who will initiate a child-support case on contingency. In fact, several states have now contracted out some of their collection work to private firms. The likelihood is that ever more women may find themselves following in the footsteps of Minnesotan JoAnn Anderson. She filed a child-support claim with the state in 1990; nothing happened. In 1993 she hired Hoffman's firm, which located him within a few weeks. She now receives $1,600 a month. "I don't mind paying their fee," she says. "I am certain Minnesota would never have gotten him to pay anything."

--Reported by Melissa August/Washington, S.C. Gwynne/Austin and Jeanne McDowell/Los Angeles

With reporting by MELISSA AUGUST/WASHINGTON, S.C. GWYNNE/ AUSTIN AND JEANNE MCDOWELL/LOS ANGELES