Agreeing on Standards for Collection Process Serving Can be Tricky

DENVER – Tuesday marked the opening session of the inaugural Process Serving Standards Summit, held at the Four Seasons in Denver.

The summit is a collaborative effort among process servers who deal with collection agencies, collection attorneys, debt buyers, and creditors. The goal: come up with a set of voluntary standards which help regulate the activities in the process serving arena.

David Silverman of Silverman/Borenstein PLLC noted in his Conference Welcome speech that self-regulation provides a unique opportunity for an industry. “Be the deterrent to government regulation,” he said. “This is not only possible, but preferable.”

However, it’s not an entirely smooth road from suggesting a list to adopting that list, as the day’s conversations illustrated.

Some background: process servers are used by collection attorneys (among others; however, we’re going to focus on the collections arena in this case) to serve court documents to consumers who are being sued for non-payment of a debt. As things currently stand, there is not an industry-wide set of standards used when handling these types of process serving papers — and this is increasingly becoming an area of focus for consumer attorneys looking to sue collection law firms for violations.

Process serving in the legal collection channel was put under the microscope in 2009 at one of the FTC’s roundtables on legal debt collection. Regulators on the state and local level, most notably New York State and New York City, have also made debt collection process serving a top priority.

Jacques Machol III, managing attorney at Machol & Johannes LLC, reminded attendees of the process server exclusion in the Fair Debt Collection Practices Act (FDCPA) for collection accounts: “It excludes ‘any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt.’”

But that exclusion is not without caveats — and points to one of the reasons why many in the process serving industry see a need for voluntary standards. For instance, a process server working on behalf of a collection attorney “who goes beyond being merely a messenger…and engages in prohibited abusive or harassing activities to force an individual to repay a debt” will find himself outside of the protection of that FDCPA exclusion.

Additionally, if, while serving collection-related legal documents, a process server inadvertently – or, even, not inadvertently — provides skip-tracing services for the collection attorney (if, for example, while serving papers a process server asks for an updated telephone number or place of employment; and that information is then used by the collection attorney in pursuit of that debt), then the process server may be out of the bounds of that exemption protection and can find himself in danger of an FDCPA violation.

The issues are further complicated for collection attorneys. In many instances, collection attorneys have been liable for the activities of their process servers, who are often independent contractors. Without a set of voluntary standards through which collection law firms can guide process servers, law firms expose themselves to significant risk. Machol reminded attendees of the words of New York’s attorney general: “I am putting all law firms on notice that they are responsible for the conduct of the companies they use to serve complaints and other legal documents. Law firms cannot turn a blind-eye to abuses perpetrated on their behalf.”

Technology might present itself as at least the first steps towards some process serving standards. Scott Levine, president of JJL Process Corporation, one of the sponsors of the Process Serving Standards Summit, shared what some of the benefits technological advances provide in relation to compliance and transparency. From GPS-verified addresses to time/date verification via smartphones, Levine sees these as wins for the industry. “Transparency is the best thing for our clients and for the industry,” Levine said. “It puts into black and white what’s sometimes a gray area.”

Not that everyone agreed. During a Q&A about the draft standards, some questioned whether standards might actually hamper those in the industry not prepared to adopt them.

“Can these standards, once they’re on paper, be used against us?” one attendee asked. Others worried about technological failures that might interfere with compliance with the voluntary standards. “What if the GPS coordinates turn out to be incorrect? What if lose the photograph of the residence?”

After a review of the draft voluntary standards by everyone present at the Summit, the Executive Committee took all comments under advisement and discussed them in an executive session. After this review, the standards will be presented again today, Wednesday 11 July, to the group as a whole for a final vote. Each company present has one vote on each of the standards — yay or nay. The hope for the final outcome is a set of voluntary standards that can guide the process serving industry towards compliance, transparency, and innovation.

The draft standards can be viewed here; the final version of the standards, and next steps, will be discussed in sessions on Wednesday.