Due to massive fraud perpetrated in 2009 by the process serving company American Legal Process (ALP), a state-wide investigation was held, led by then Attorney General, Andrew Cuomo, into the practices of many law firms and debt collectors. This resulted in the NYC Department of Consumer Affairs (DCA) changing its rules and regulations, affecting the legal industry as a whole. Some of these recent changes include:
For Process Servers
1. Servers must now obtain $10,000 Surety Bond. If unable to do so, servers must place a non-refundable $1000 deposit into a city fund every two years upon renewal or application for license.
2. Servers must now purchase and utilize a mobile device with GPS technology for EVERY paper served or attempted.
3. A record of this attempt or service must then be transmitted to a contracted independent 3rd party, in addition to compliance reporting to DCA.
4. Servers must now include additional and duplicate contemporaneous record keeping – both digital and in their logbook.
5. Every attempt at service must have its own logbook entry. Previously, only completed services had to be entered.
6. Servers must now pass a DCA-administered examination for a license or renewal at a cost of $75 every two years.
The above has resulted in significant increases in both the cost and time it takes to complete the necessary compliance requirements.
For Process Serving Agencies
1. Agencies must now obtain a $100,000 surety bond. If you cannot obtain one, you cannot be licensed and thus are OUT OF BUSINESS.
2. Agencies must have a separate contract with an independent 3rd party that will maintain and store digital records.
3. Agencies must now keep for three years, a copy of every affidavit of service signed and notarized, as well as any other records submitted to/by process server.
4. Agencies must now purchase new software and software updates as well as additional computer hardware and other office equipment to comply with new DCA-imposed rules.
5. Agencies must hire and train additional staff to comply with aforementioned rules.
The above has resulted in significant increases in both cost and the time it takes to complete the necessary compliance requirements.
In order to be as informed as possible, I encourage you to check out the following links:
For more information on the changes from DCA go to this link: http://www.nyc.gov/html/dca/downloads/pdf/ps_educational_materials.pdf
For more information on ALP and the law firms involved go to these links: