Why agency finances became the first question in 2026
For years, the first question intended parents asked an agency was "how much?" After two failures in which families could not reach money they had deposited, the first question is now "who holds it?"
Surro Connections, a US surrogacy agency, collapsed in late 2025, leaving surrogates unpaid and intended parents without access to their funds. A federal indictment followed in August 2026. Status as of [date], reviewed by counsel. The SEAM escrow failure involved more than $16 million in client funds. Status as of [date], reviewed by counsel.
In both cases the problem was not that surrogacy is risky. It was that money sat where the parties could not see it or control it. That is a structural problem, and you can check for it before you pay a single fee.
The five checks below take an afternoon. Run them on every agency you are considering, including Private Label Surrogacy.
Check 1: who holds the surrogate's money?
The surrogate's compensation and expenses are the largest sums in a journey, and they are deposited months before most of it is paid out. Whoever holds that money holds your financial safety.
A good answer: an independent licensed escrow agent, with no ownership, staff or address shared with the agency, holding funds in a segregated account in the parties' names. You can choose the escrow company. You can contact it directly. The agency cannot move funds.
A red-flag answer: the agency holds it in a "trust" or "client" account; a company owned by the same people holds it; or you are not allowed to choose.
How to verify: get the escrow company's name in writing. Look up its officers and address and compare them to the agency's. Call the escrow company on a number you found yourself and ask who has authority over the account.
At PLS: you fund an independent licensed escrow agent, $10,000 at match and the balance before medications start. You may choose your own escrow company. PLS has never held client funds.
Check 2: can you verify the escrow agent's license and your deposit?
An escrow company is only as safe as its licensing and controls. The SEAM failure showed that "we use escrow" is not enough. You need to see which escrow, and how it is overseen.
A good answer: the escrow company gives you its state license number, proof of bonding, the name of the bank, and an escrow agreement that names you as depositor. After you deposit, statements come from the escrow company directly, every month, with a notice for each disbursement.
A red-flag answer: the license number is "on file"; the bank is not named; statements come from the agency.
How to verify: look up the license on the state regulator's site. Licensing rules differ by state, and some states do not license escrow companies; counsel to confirm. Ask for a sample statement before you deposit. After you deposit, confirm the balance with the escrow company by phone.
Only a few states, California among them, legally require surrogacy funds to be held in escrow. In Illinois and most states it is agency policy. So you have to ask.
Check 3: how is the agency fee staged?
An agency fee paid in stages, tied to work done, keeps less of your money with the agency before it has earned it. A fee paid in full at signing does the opposite.
A good answer: the fee is split into parts, each due at a milestone, with the milestones written into the agreement.
A red-flag answer: full payment at signing; a large discount for paying everything up front; fees due before a surrogate has been screened.
How to verify: read the payment schedule in the agency agreement. For each payment, ask what work has been done by the time it is due.
At PLS: the program fee is $47,500. It is billed $22,500 at signing, $20,000 at surrogate acceptance and $5,000 at medical clearance. Third-party costs (legal, escrow, psychological evaluation, background checks, insurance review, travel and monitoring) total $15,300 to $29,000 and are paid to those providers, not to PLS. See the full cost of surrogacy.
| Question | Good answer | Red-flag answer | How to verify independently |
|---|---|---|---|
| Who holds surrogate funds? | Independent licensed escrow agent you can choose | The agency or an affiliate | Compare the escrow company's officers and address to the agency's |
| Can I see the license? | License number, state and bond provided | "It is on file" | Look it up on the state regulator's site |
| In whose name is the account? | The parties, at a named bank | The agency, or bank not disclosed | Confirm with the escrow company by phone |
| Who sends statements? | The escrow company, monthly, directly to you | The agency | Ask for a sample statement before depositing |
| How is the agency fee staged? | In parts, tied to milestones | Full payment at signing | Read the payment schedule in the agreement |
| Who owns the agency? | Named owners; no undisclosed investors | Will not say | Check state business records |
| Does the agency carry debt or investor obligations? | A plain answer | Evasion | Ask in writing; ask your attorney to review |
| SEEDS membership? | Yes, or a published standard | No standard | Check directly with SEEDS |
| References? | A recent parent and a surrogate | Refused | Ask both about payment timing |
Check 4: who owns the agency and what does it owe?
Ownership tells you who the agency answers to. Debt and investor obligations tell you what pressures it is under.
An agency owned by its founders answers to them. An agency owned by investors, or carrying significant debt, has other people to satisfy. None of that is wrong. But an agency under financial pressure is more likely to cut corners on screening, to push for early payments, or, in the worst cases, to reach for money that is not its own.
A good answer: the agency names its owners and answers plainly whether it has outside investors or debt obligations.
A red-flag answer: "That is confidential," or a change of subject.
How to verify: check your state's business records for the agency's registered owners and officers. Ask your attorney to review anything the agency provides.
At PLS: PLS was founded in 2017 by Nancy Block, RN. [Ownership and debt statement to be confirmed by PLS.]
Check 5: ethics membership, complaints and references
Ethics membership. SEEDS, the Society for Ethics in Egg Donation and Surrogacy, is a professional organization whose members commit to published standards and can be reported. Membership does not guarantee good practice. An agency that is not a member should be able to tell you what standard it follows instead.
Complaints. Search the agency's name with words like "complaint," "lawsuit" and "unpaid." Check your state attorney general's consumer complaint process and the Better Business Bureau. Read with care: one complaint is not a pattern.
References. Ask to speak with a recent intended parent and a surrogate who has delivered with the agency. Ask both about payment timing. Late payments usually show up on the surrogate's side first.
At PLS: Nancy Block, RN, is a former President of SEEDS and received its 2018 Shining Star Award. PLS's current SEEDS membership status to be confirmed. PLS publishes the PLS Standard.
What happened at Surro Connections and SEAM, and what it taught
Surro Connections collapsed in late 2025. Intended parents and surrogates lost access to funds entrusted to the company. A federal indictment followed in August 2026. This page does not state or predict the outcome of the case. Status as of [date], reviewed by counsel.
SEAM was an escrow company used by many agencies. Its failure involved more than $16 million in client funds. Status as of [date], reviewed by counsel.
The lessons are practical:
- Money controlled by an agency or its affiliate is at the agency's risk. When the business fails, the money goes with it.
- Escrow is only as safe as its licensing, bonding and controls. "We use escrow" is the start of the conversation, not the end.
- Verification has to be direct. Statements from the agency are not verification. Statements and phone access from the escrow company are.
- Surrogates are affected first. When payments stop, surrogates mid-pregnancy carry the immediate cost.
In 2025 and 2026, PLS took on three surrogates, pro bono, who were stranded when their agencies failed. One night the PLS after-hours team rebooked a stranded surrogate's hotel, car and flight while another PLS surrogate delivered twins.
Red flags on a first call
Listen for these on your first conversation with any agency:
- "We hold the funds in our own trust account."
- "Our escrow partner is part of our family of companies."
- "There is a discount if you pay everything today."
- "We do not itemize; it is all-inclusive."
- "The surrogate does not need her own attorney."
- "We do not give out the bank name."
- "We do not share references."
- Pressure to sign before you have read the agreement.
None of these proves an agency is in trouble. Each one is a reason to slow down and ask in writing. For the escrow side in detail, see the escrow overview. To compare Illinois agencies on these points, see the Illinois agency comparison.
Sources
- [Federal indictment, August 2026, Surro Connections: court and case number.]
- [News reporting on Surro Connections and SEAM: outlet, headline, date. Source for the $16 million figure.]
- SEEDS, Society for Ethics in Egg Donation and Surrogacy.
- State escrow licensing rules, pending review by counsel.
- Private Label Surrogacy fee schedule and escrow policy.