TN 14 (04-00)
GN 02406.025 Nonreceipt of EFT Payment Directed to a Subaccount Held By a Non-Bank Service Provider
To comply with the requirement that all Federal payments after January 1, 1999, must be made by some form of EFT, some non-bank financial service providers (e.g., a check cashing service) have developed a method to allow them to continue providing service to SSA's beneficiaries. They may establish a master account at a financial institution and provide subaccounts at their place of business (or the FI) for their customers. When the electronic payment is received, the service provider releases it to the customer upon proof of identity. Often the disbursement is made in the form of a paper check drawn on the service provider's bank. The customer has the option of cashing the check at the service provider's location or taking it elsewhere to be deposited or cashed. The benefit of this arrangement is that it allows beneficiaries who do not qualify for a traditional bank account, or who do not want a bank account, to be paid electronically.
When a beneficiary alleges nonreceipt of a payment and states that his/her benefits are usually received as checks from a check cashing service or other service provider, follow the nonreceipt procedures in GN 02406.007. In addition, use the procedures below to describe the responsibilities of the check cashing service and the beneficiary.
1. What to Tell the Beneficiary
You will input a nonreceipt report to Treasury.
If the FI tells the beneficiary or DT that funds have been deposited in the special account held at the bank for the service provider, it is the service provider's responsibility to make funds available to the beneficiary.
If the payment has been deposited in the correct account, the beneficiary should contact the service provider for his/her benefit.
2. Beneficiary Loses the Check
Do not input nonreceipt if the beneficiary has lost the check after receiving it from the check cashing service. Refer the beneficiary to the service provider. Explain that:
The service provider may be able to stop payment on the check and issue another; and
After the check has been issued to the beneficiary by the service provider, it (or the cash from the negotiated check) become the beneficiary's responsibility.
Allegation of nonreceipt of direct deposit payment, GN 02406.007.