TN 20 (10-17)

GN 02403.156 Money Orders Received from Bankrupt Money Order Companies

A. Introduction – Money order company declared bankruptcy

There may be occasions when a money order company declares bankruptcy, or otherwise goes out of business or closes its account.

B. Procedure – Money order company declared bankruptcy

Whenever a field office (FO) becomes aware that a money order company has declared bankruptcy, or taken some other action which renders the money orders worthless, the FO takes the following actions:

  • Immediately notifies the regional office, which will then FAX the information about the bankruptcy to the Office of Financial Policy and Operations (OFPO) in Baltimore, at 410-965-0384. OFPO will issue an appropriate NEWS item; and

  • Stop accepting money orders from that company.

In those cases where the Mid-Atlantic Payment Service Center (MATPSC) learns about the problem with the money order company after a money order has been accepted, MATPSC will notify OFPO by fax at the number above, and forward the returned remittance and a photocopy of the Field Office Remittance Transmittal (FORT) to the FO.

The FO takes the following actions:

  • Notify the remitter that the money order was not acceptable, and request a replacement remittance.

  • If the remitter submits a replacement remittance, issue a new receipt, and forward the payment to the MATPSC via a new FORT.

  • Delete the original receipt in DMS, see MS DMS 004.011, after cross-referencing it to the remittance ID field of the new receipt.

  • Provide the remitter with as much information as available, so the remitter may file a claim against the money order company.

  • If the remittance is for an installment, extend the remitter's installment agreement timeframe an additional month. See MS DMS 006.014.

The Social Security Administration (SSA) may not give credit for the returned remittance if it was purchased by the debtor; however, if SSA purchased the money order to process a cash remittance, credit the debtor's account and file a claim against the company to recover the purchase price of the money order.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0202403156
GN 02403.156 - Money Orders Received from Bankrupt Money Order Companies - 10/23/2017
Batch run: 10/23/2017
Rev:10/23/2017