A fee violation occurs when a representative knowingly charges, collects,retains,
or arranges to charge, collect, or retain, from any source any fee for representational
services in violation of applicable law or regulation. Refer to GN 03970.010C.2. The representative's actions may be direct or indirect, and the unauthorized fee
collection may be total or partial.
NOTE: Some non-profit organizations have internal rules prohibiting individuals working
on their behalf from requesting or receiving fees for their services. Because we recognize
individuals and not organizations as representatives, we do not involve ourselves
in the business process of these organizations. It is not a violation of our fee rules
for an appointed representative, who a non-profit organization employs, to seek our
authorization for, or direct payment of, an authorized fee under either the fee agreement
or fee petition process.
For procedures for development and referrals of suspected fee violations, see GN 03970.017.
a. Total unauthorized fee collection
A total unauthorized fee collection occurs when a representative collects a fee directly
from the claimant, any affected auxiliary beneficiary, or another individual (whether
related or unrelated to the claimant or affected auxiliary beneficiaries) without
our prior authorization.
NOTE: Payments to a representative by third-party entities are an exception to our general
authorization requirement. For more information on fees that are not subject to our
authorization, see 20
CFR 404.1720(e), 20
CFR 416.1520(e), and GN 03920.010.
b. Partial unauthorized fee collection
A partial unauthorized fee collection occurs when we authorize a fee based on a fee
agreement or fee petition, but a representative collects an amount in excess of the
fee we authorized. The amount over the authorized fee is a partial unauthorized fee
collection.
NOTE:
If we pay a representative in error and he or she does not return the excess fee on
receipt or after notification of the error, the direct payment error may result in
an unauthorized fee collection. This unauthorized fee collection could be “partial”
or “total.”