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Tuesday, August 25, 2009

Private Process Servers - Scapegoats!

Earlier this month the Federal Trade Commission held a two day roundtable discussion in Chicago to address debt collection litigation and arbitration. The opening session was on the following topics:

Initiating Suits - Default Judgments and Service of Process.

The Panel was made up of approximately fifteen speakers ranging from Judges, Professors, Consumer Advocates, Debt Buyers and Collection Lawyers.

Over the course of an hour or so process servers took a beating. It was strongly suggested that the high default rates associated with consumer debt collection cases nationally were the result of among other things improper service of process, a complete lack of service or "sewer service".

By now, anyone that is paying attention to the challenges facing the public image of the private process serving profession has read about the situation in New York where it is alleged that a process serving agency was not properly serving collection law suits for some of the largest collection law firms in the country. Currently the New York Attorney General is investigating the practices of process serving agency in question and has suggested that as many as 100,000 default judgments may be thrown out or set aside. It is also worth noting that the AG is also focusing on the collection law firms as well and has indicated that they had a duty to oversee the process serving agency whose practices have come into question.

Needless to say, the panel was fully aware of this story and others such instances. The result was more than an hour focused on this issue. The panel discussions went on over a two day period and throughout the sessions the process serving issues continued to be raised.

Having sat through the webcast of this event a few comments were most troubling. They are not verbatim because I have not read the official transcript yet, so I will paraphrase:

• Speaker - Why isn't the National Association of Professional Process Servers here?
• Speaker - I am not sure that such an organization even exists.

• Speaker - Process servers should be subject to the Fair Debt Collection Practices Act (FDCPA)
• Speaker - I would like to see several things that should be define what we see as unfair deceptive practice. First the filing of a false return of service in a collection case.

• Speaker - 85 to 95% of collection cases result in defaults. The high default rate means no process is being served, we need to require servers to keep log and they should be forced to make them public.

• Speaker - I think the three biggest problems that I see, first one is one that has not been redressed by the statutes yet and that's the service of process. It is a problem that does not start with judicial supervision. It starts with the process server making a decision to do something outside the courtroom namely not serve that process on the defendant.

To be fair, process servers were not the only industry that took heat. The debt buyers, collection agencies, and collection law firms took their fair share of the focus.

The image of process servers in my opinion is at an all time low. Even in the best of times we are about as popular as the tax man. I believe the current problems are a result of a few bad apples, but you would not know that if you were reading all the bad PR. It is time that professional process servers start policing their own and get serious about addressing their image problem.

If you are interested in seeing the webcasts for yourself and reading the transcripts of the sessions, please visit http://www2.ftc.gov/bcp/workshops/debtcollectround/#090805 for all the information. You will also find information at that link on the next roundtable discussion in San Francisco, CA, next month.