Compliant Civil Process Service Part 1 of 3: Rolling with Regulation Changes and Conducting Audits
- August 27, 2014
- by Stephanie Irvine
- Business Tips
- Legislation
- Technology
Compliance, transparency, and accountability have taken over the civil process and collections industries and continue to be critical aspects of doing business. In this first part of a three-part series, we are taking a hard look at how current compliance regulations and audit standards have affected the industry.
The legal industry has always been a compliant group— practicing within the four corners of the law. The regulations are an attempt to codify what we have been doing all along.
Lou Freedman, former NARCA President
Requirements
Across the US, civil process servers are bound by law to stay compliant with each state’s regulations. Sewer service, fraud, and botched paperwork have paved the way for these stricter compliance measures— scandals that have blackened the eye of the process server industry in the past. Efforts to clean the slate and put negative headlines in the past have made the process service industry buckle down and effectuate service as transparently as possible. Everyone, including debt collection attorneys, banks, and process servers are subject to audit inspection, at any time, for security, accuracy, and completeness of important documents.
Process servers are required by law, and by their clients, to abide by a laundry list of very specific regulations. What makes the task of staying in compliance more complicated — especially for larger companies providing process of service throughout multiple states — is that each state legislates its own regulations. While the rules of civil procedure are often common sense in nature, such as providing a service affidavit with a full physical description of the individual served along with a complete description of when and where the service occurred, other states require more in-depth service to be compliant. For example, New York City not only requires a physical description and service details, but service affidavits must be provided with original signatures or a GPS verified record, and every form used in the process is required to be approved at the state and federal level. Strict civil process regulations can also be found in California, Texas, and New Jersey.
To get a feel for how the collections industry is handling the increased compliance regulations, we spoke with former NARCA President Lou Freedman, who affirmed that “The legal industry has always been a compliant group— practicing within the four corners of the law. The regulations are an attempt to codify what we have been doing all along.”
The CFPB requires our clients to perform audits. It is in the best interest of our clients to comply given they are high volume clients.
Ashley Keeney, Director of Marketing at Professional Civil Process
Audits
Civil process servers are required by many clients to conduct internal audits and be subject to external audits at a moment’s notice. Beyond just audits of employee licensure, insurance, and bonding, of course, service affidavits, security measures, etc., civil process service companies must monitor process server performance, especially for any suspicious trends.
And it’s not just process servers who are being audited. The CFPB is auditing the banks that initiate the collections process, and the banks are auditing the attorneys. It seems that the days of simple trust are over— accountability and transparency must be documented and proven.
Ashley Keeney, Director of Marketing at Professional Civil Process, stated that “The CFPB requires our clients to perform audits. It is in the best interest of our clients to comply given they are high volume clients.”
The New York City Department of Consumer Affairs also required civil process service vendors to have a written compliance program in place, complete with training policies and procedures, and even a designated compliance officer. Furthermore, compensation plans are monitored to make sure that servers are not given a monetary incentive for just getting the job done.
Fred Blitt of Blitt & Gaines stated that “Attorneys can’t just use anyone. Everyone has to be compliant— the CFPB holds the banks to the same level of standards just as we hold our process servers accountable for compliance. We all have to be compliant.”
In response to the call for increased transparency, some civil process service firms have taken the initiative to have their own audits completed by a third party by obtaining SOC certifications. Large civil process service firms like JJL, Firefly Legal, and ProVest have all taken steps to make sure their clients’ needs for transparency and accountability are satisfied.
Attorneys can’t just use anyone. Everyone has to be compliant— the CFPB holds the banks to the same level of standards just as we hold our process servers accountable for compliance. We all have to be compliant.
Fred Blitt, Attorney at Blitt & Gaines
Blitt also acknowledged that the additional requirements make things more difficult for process servers and stated that they must be able to handle compliance changes, noting that larger process servers will likely be busier as other process servers not equipped to handle the changes will fade away into obscurity.
Compliance means more than just getting the job done. Compliance means getting the job done the right way, which requires process servers to keep a close eye on service, making sure that attempts are done at different times and days, that there are no service conflicts (meaning there must be no discrepancy of when and where process servers are attempting service— it must be physically possible to attempt service), that all security measures are in place (both electronically and physically), and that service is effectuated in the most ethical way possible.
While not all process servers are on board with allowing audits and increased transparency, it is evident that the industry has changed. Check back with us for the second part in the series, where we will look at how increased compliance regulations have changed the way process servers use technology.