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Clarity Issued by the FCA on ‘Pure Process Serving’

Clarity Issued by the FCA on ‘Pure Process Serving’

It had recently been suggested that Process Serving of any document that was in relation to a debt incurred subject to a credit agreement, a relevant A36H or agreement or consumer hire agreement should only be carried out by a company or firm regulated by the Financial Conduct Authority.

Following representation by the Association of British investigators (ABI) the Financial Conduct Authority (FCA) has reviewed the licensing requirement under the Consumer Credit Act for the activity of ‘Pure Process Serving’ and issued the following guidelines:

‘Pure Process Serving’ is meant that: –

– The firm (a process server) is instructed by a law firm, or in-house solicitor, to serve legal documents on the recipient as part of the pre-court legal process.

– The firm will serve a variety of different types of documents (e.g. County Court or High Court Claim Forms, Bankruptcy Petitions, Statutory Demands, Court Orders and Applications), some of which may relate to debts due under credit agreements, but many of which may not.

– The firm will be aware of the legal nature of the document, but will not be told about or investigate the cause of action or the underlying circumstances. For example, the firm may not be aware whether the claim is for a consumer credit debt or a different type of debt.

– The firm will take steps to ensure that the recipient understands the legal nature of the document and the fact that it is part of a legal process (e.g. that it is a Claim Form), but will not engage in any discussion or negotiation with the recipient about the contents of the document or the substance of the action.

– If the recipient initiates discussion, the firm will direct the recipient to the law firm or in-house solicitor, which instructed the firm.  ‘Pure Process Servers’ will not serve other documents such as CCA default notices

The FCA agrees that where in England a firm is instructed to undertake ‘Pure Process Serving’, the firm should not be regarded as being engaged in ‘debt collecting’ i.e. taking steps to procure the payment of a debt due under a credit agreement (or a relevant A36H agreement) or a consumer hire agreement.   Thus the FCA is of the view that firms engaged in this (and not doing any other activity which might constitute debt collecting or debt administration) do not need authorisation and the FCA intends to operate on that basis pending amendment to the Perimeter Guidance (PERG) in the FCA Handbook, following consultation.

However, the FCA stresses that this is a question of interpretation of legislation, which ultimately is for the courts to decide, and the FCA cannot rule out the possibility that a court might decide on the facts that a ‘Pure Process Server’ is in fact engaged in regulated activity.

Mark Hodgson, Vice President of the ABI (and Managing director of Tremark) said ‘I am extremely grateful to the FCA for the manner in which it engaged in dialogue, listened to the concerns of our members and have now provided the industry with clear guidelines.’

Tremark are a ISO9001:2008 and BSO102000:2013 accredited company, with a network of more than 80 experienced agents across the United Kingdom. Tremark offer confidential, reliable and professional process serving ensuring that all correspondence and legal documents are served personally within days of instruction.

For more information on our process servers please click here.

About The Author

Mark Hodgson is the Managing Director of Tremark Associates, one of the UK’s leading providers of investigative services. Mark has 30 years experience in private Investigations and the commercial debt recovery industries. He is Vice President of the Association of British Investigators, a member of the World Association of Detectives, The Institute of Credit Management and an associate member of R3 -The Association of Business Recovery Profession.