TN 6 (04-12)

A. Introduction to FO and PC actions on direct payment error fee violations

Direct payment errors occur when we pay a fee in excess of the authorized fee to a representative. Examples of direct payment errors include issuing:

1. duplicate fee payment checks or direct deposits;

2. one or more checks or direct deposits totaling an amount exceeding the authorized fee;

3. a check or direct deposit before the Social Security Administration (SSA) verifies claimant information (e.g., Workers’ Compensation payments) that offsets (i.e., reduces) the claimant’s past-due benefits and the fee authorized under the fee agreement process;

4. a check before SSA determines a fee amount during an administrative review, and the final determination reduces the authorized fee;

5. a fee payment even though the representative stated on a fee petition that he or she had already collected some or all of the fee from the claimant and placed that money in a trust or escrow account;

6. a fee payment even though the representative waived his or her right to charge and collect a fee in the claim.

B. Procedure for FO and PC development of direct payment error fee violations

Before developing for a direct payment error fee violation, attempt to recover the direct payment error by contacting the representative by telephone and explaining the error. If the representative agrees to refund the excess payment and does so, there is no need to develop the fee violation. If the representative does not agree to refund the excess payment, or fails to make the refund, proceed with this development. See also GN 03970.017B.1.

Use the following instructions to process title II and title XVI direct payment error fee violations:

Review the Payment History Update System (PHUS) (SM 00545.000) or Supplemental Security Record (SSR) (SM 01601.400) and Single Payment System (SPS) MSOM SPECPAYSYS 001.003 Payments outside the Title II System (POTS) for payments issued to the appointed representative.

1. Request copies of all relevant United States Treasury checks (front and back) (GN 02406.140) or proof of direct deposits (GN 02406.007) issued to the representative. Authorized users in each field office (FO) and processing center (PC) can retrieve this data online from the Treasury Check Information System, if payment is less than two years old.

2. Use the language and instructions in GN 03970.025C (in this section) to prepare and send a notice only to the representative requesting repayment of the excess fee.

   NOTE: Use language that is neutral in tone and not presented in a confrontational manner. Generally, we deal with representatives who follow our rules. Therefore, we must be positive in the determination of a violation and its presentation. Direct any questions to the appropriate Office of the General Counsel (OGC) via e-mail at the electronic addresses listed in GN 03970.070A.

C. Procedure for FO and PC notice preparation and control

On SSA letterhead, prepare a notice using the following language to notify the representative of the direct payment error fee violation. Be sure to control for a reply under existing office procedures. Include the correct citation for title II (20 CFR 404.1740(c) ,) or title XVI (20 CFR 416.1540(c) ) or both, depending on the claim(s) involved. Following are sample notices you can adjust to fit your situation:

1. Sample notice for duplicate payment

Date:

Dear _____________:

As the representative of John Doe in his claim for entitlement to social security benefits under John Doe, you were authorized a fee for your services in the amount of $6,000. Through error, we made a duplicate payment to you, and you received $6,000 in excess of the fee authorized to you.

As a result, you owe the Social Security Administration $6,000. Please refund this amount within 30 days from the date of this notice. Make your refund payable to the “Social Security Administration” and include the claimant’s full name and full Social Security Number (SSN) on your refund. Mail the refund to: (Insert the FO’s or PC’s address).

If you fail to comply in a timely manner, we may refer the matter to the Office of the General Counsel as a potential violation of our fee collection rules at 20 CFR 404.1740(c), which may warrant proceedings to suspend or disqualify you from practicing before SSA, under 20 CFR 404.1745 and 20 CFR 416.1545.

FO Manager or PC Manager (no signature needed, title only)

Enclosures:

Copies of the United States Treasury checks issued to the Representative

Self-addressed, Unfranked return envelope

2. Sample notice for excess payment

Date:

Dear _____________:

As the representative of Jane Doe in her claim for supplemental income benefits under Jane A. Doe, you were authorized a fee for your services in the amount of $600. Through error, we paid you $850, which is $250 in excess of the fee authorized to you.

As a result, you owe the Social Security Administration $250. Please refund this amount within 30 days from the date of this notice. Make your refund payable to the “Social Security Administration” and include the claimant’s full name and full Social Security Number (SSN) on your refund. Mail the refund to: (Insert the FO’s or PC’s address).

If you fail to comply in a timely manner, we may refer the matter to the Office of the General Counsel as a potential violation of our fee collection rules at 20 CFR. 416.1540(c), which may warrant proceedings to suspend or disqualify you from practicing before SSA, under 20 CFR 404.1745 and 20 CFR 416.1545.

FO Manager or PC Manager (no signature needed, title only)

Enclosures:

Copies of the United States Treasury checks issued to the Representative,

Unfranked return envelope

3. Sample notice for unauthorized fee

Date:

Dear _____________:

As the representative of Bob Random in his claim for entitlement to disability benefits under Bob Random, you were not authorized a fee for your services. Through error, we made a payment to you of $6,000. This is an unauthorized fee.

As a result, you owe the Social Security Administration $6,000. Please refund this amount within 30 days from the date of this notice. Make your refund payable to the “Social Security Administration” and include the claimant’s full name and full Social Security Number (SSN) on your refund. Mail the refund to: (Insert the FO’s or PC’s address).

If you fail to comply in a timely manner, we may refer the matter to the Office of the General Counsel as a potential violation of our fee collection rules at 20 CFR 404.1740(c) which may warrant proceedings to suspend or disqualify you from practicing before SSA, under 20 CFR 404.1745 and 20 CFR 416.1545.

FO Manager or PC Manager (no signature needed, title only)

Enclosures:

Copies of the United States Treasury checks issued to the Representative, if appropriate

Unfranked return envelope

D. Procedure for processing representative’s response to a notice

1. Representative agrees and complies

Take the following actions if the representative complies with the notice:

1. Document the file, DMS, and MCS (RPOC) or MSSICS (DROC) to record receipt of a full refund;

2. Process the remittance for credit to the trust fund for title II refunds, to the general fund for title XVI refunds, or both, per FO instructions in GN 02403.006 and PC instructions in its operations bulletins. On SSA letterhead, send the representative a brief letter to acknowledge receipt of the check and to state that since he or she has complied, SSA considers the matter closed. Use the following language:

   This acknowledges receipt of your payment of $ (enter amount of payment) in the claim of (NH’s first and last name).

   Since the issue of the fee collection is settled, we now consider the matter closed.

   FO Manager or PC Manager

3. If there is a paper claims file, place a copy of the letter in the claim file. Always store the notice in the Online Retrieval System.

2. Negative response, payment negotiation or installment payment request, or no response

If the representative responds negatively to the request for refund, denies receipt of the duplicate or erroneous payment, wants to negotiate payment, or fails to reply within the required time, develop the fee violation per the instructions in GN 03970.017. Refer to GN 03970.010 for definitions of violations.

3. Representative inquiries

If the representative responds to the letter by requesting an explanation or further documentation, the FO and PC will comply with the request, if possible. If the matter remains unresolved, complete development for a referral to OGC.

E. References

• GN 02403.003 The Field Office Remittance Input

• GN 02403.004, Remittance Handling in the FO Mailroom and Reception Area

• GN 02403.005 Examining Remittances Received in the FO

• GN 02403.006 Processing Remittances Received in the FO

• GN 02405.000 Processing Unendorsed Returned Benefit Checks - Title II and Title XVI

• GN 02405.006 Returning Unendorsed Checks to the Field Office

• OS 00501.035 List of Remittance Codes

• MSOM DMS 003.001 Debt Management System Remittance Process – Overview

• MSOM DMS 003.003 PC Remittance Input (REMI)

• MSOM DMS 003.006 Field Office Remittance Input (RFOR)