TN 9 (12-15)

GN 03970.010 Rules of Conduct and Standards of Responsibility for Representatives

Citations:

Social Security Act Secs. 206, 206(a), 1631(d), 208, 1106, 1107, and 1631(d)(2)

Federal Regulations sections,20 CFR 404.1512; 20 CFR 404.1740; 20 CFR 416.912; 20 CFR 416.1540

A. Introduction to rules of conduct and standards of responsibility for representatives

To ensure that claimants receive competent services from their representatives and to improve the efficiency of our administrative process; we formulated the Rules of Conduct and Standards of Responsibility for Representatives (20 CFR 404.1740 and 20 CFR 416.1540). These rules establish affirmative duties and describe prohibited actions for representatives. If the representative violates these rules, we may suspend or disqualify a representative from practicing before us.

B. Policy on affirmative duties for representatives

A representative must:

  1. Promptly obtain and submit information and evidence (that the claimant must submit under our regulations). Forward this information to the Disability Determination Services (DDS) or us immediately.

  2. Assist the claimant in complying with DDS' or our requests for information or evidence at any stage of the administrative decision-making process. In disability and blindness claims, this includes assisting the claimant to acquire and provide, or authorize us to obtain, evidence about his or her:

    • medical sources,

    • age,

    • education,

    • training,

    • work experience,

    • efforts to work,

    • daily activities both before and after the alleged onset date,

    • workers' compensation, and

    • relevant disability or non-disability related information

    NOTE: Under the regulations 80 FR 14828, March 20, 2015, a claimant must inform us about or submit all known evidence that relates to whether he or she is blind or disabled. EXCEPTION: However, there are two exceptions that usually correspond with the “attorney-client privilege” and “attorney work product” doctrines. For a detailed explanation about these exceptions, refer to GN 03970.017G. This requirement includes the duty to submit, or authorize us to obtain, all evidence that relates to the disability claim, in its entirety, unless:

    • the claimant or representative previously submitted the same evidence to us (which means the record contains an exact duplicate); or

    • one of our adjudicators instructs otherwise.

    A representative need not intend to conceal, delete, or alter evidence to violate this affirmative duty. However, when deciding whether to refer these types of violations to OGC, we will consider whether:

    • the representative’s non-submission of required evidence is an isolated incident;

    • he or she offers a reasonable explanation for not submitting evidence as required (such as a good-faith belief that it was unrelated to the pending claim); and

    • the circumstances suggest that the representative may have intended to conceal, delete, or alter evidence.

    We will refer all representatives who has repeatedly engaged in behavior that violates the duty, or all occurrences where the evidence suggests that a representative has intentionally violated the duty, to OGC.

    For more information on evidence policy and claimants’ responsibilities to obtain and submit evidence, refer to Development of Medical Evidence of Record (MER) per DI 22505.000. Representatives may submit evidence through our Electronic Records Express (ERE) portal. A representative must help a claimant obtain the information and evidence that the claimant must submit under our regulations.

  3. Conduct his or her dealings in a manner that furthers the efficient, fair, and orderly conduct of the administrative decision-making process. This includes both of the following:

    • Provide competent representation to a claimant

      Providing competent representation means that a representative knows the significant issue(s) in a claim and has a working knowledge of the applicable provisions of the Social Security Act, the Regulations, and the Social Security Rulings. The representative must also know how to obtain and submit evidence that the claimant must provide under our regulations; and

    • Act with reasonable diligence and promptness

      Acting with reasonable diligence and promptness means that the representative provides prompt and responsive answers to requests and communications from us, or DDS, pertaining to the processing of a pending claim or an appeal.

  4. Conduct business with us electronically at the times and in the manner we prescribe on matters for which the representative requests direct fee payment.

    NOTE: The first business we required be conducted electronically was the filing of certain appeals electronically, through our Disability Appeal (iAppeals) portal. This requirement applies to those representatives who are eligible for and seek direct payment. We may document and refer for investigation a representative who continually fails to comply, and repeatedly submits “paper” appeals, while requesting direct fee payment. For the regulatory language, refer to 76 FR 56107 (09/11/2011).

    When a representative should have electronically filed the appeal, but did not:

    • We will accept and process all paper appeals, (Such as the SSA-561 (Request for Reconsideration) or HA-501 (Request for Hearing by Administrative Law Judge) along with the SSA-3441 (Disability Report - Appeal)).

    • We will not return paper appeals to the representatives or ask the representatives to re-submit the “paper” appeal forms in an electronic format. We do not require submission of the SSA-1696 (Claimant’s Appointment of Representative) or the SSA-1695 (Identifying Information for Possible Direct Payment of Authorized Fees) in conjunction with the appeals submission.

    With this rule, we are not mandating that representatives use direct deposit.

    This new requirement does not affect direct payment of fees. We will continue to pay fees directly to an eligible representative on cases where he or she has requested direct payment, even for paper appeals.

C. Policy on prohibited actions for representatives

A representative must not:

  1. In any way threaten, coerce, intimidate, deceive, or knowingly mislead a claimant, or prospective claimant or beneficiary, regarding benefits or other rights under the Social Security Act.

  2. Knowingly charge, collect, or retain, or arrange to charge, collect, or retain, from any source, directly or indirectly, any fee for representational services in violation of applicable law or regulation.

  3. Knowingly make or present, or participate in the making or the presentation of, false or misleading oral or written statements, assertions, or representations about a material fact or law concerning a matter within our jurisdiction.

  4. Through his or her own actions or omissions and without good cause, unreasonably delay or cause to be delayed, the processing of a claim at any stage of the administrative decision-making process. Unreasonable delay is delay that is not justifiable, or delay that is preventable with reasonable care.

  5. Divulge, without the claimant's consent, except as authorized by regulations prescribed by us or as provided by Federal law, any information we, or the DDS furnishes or discloses about a claim or prospective claim.

  6. Attempt to influence, either directly or indirectly, the outcome of a decision, determination, or other administrative action by offering or granting a loan, gift, entertainment, or anything of value to a presiding official, SSA or DDS employee, or witness who is or may be expected to be involved in the administrative decision-making process, except as reimbursement for legitimately incurred expenses or lawful compensation for the services of an expert witness retained on a non-contingency basis to provide evidence.

  7. Engage in actions or behavior prejudicial to the fair and orderly conduct of administrative proceedings, including, but not limited to:

    • repeated absences from, or persistent tardiness at, scheduled proceedings without good cause;

    • willful behavior which has the effect of improperly disrupting proceedings or obstructing the adjudicative process; and

    • threatening or intimidating language, gestures, or actions directed at a presiding official, witness, or SSA or DDS employee that results in a disruption of the orderly presentation and reception of evidence.

  8. Violate any section of the Act for which the law prescribes a criminal or civil monetary penalty.

  9. Refuse to comply with any of our rules or regulations.

  10. Suggest, assist, or direct another individual to violate our rules or regulations.

  11. Advise any claimant or beneficiary not to comply with any of our rules or regulations.

  12. Fail to comply with our decision about sanctions.

  13. Knowingly assist someone who is suspended or disqualified to provide representational services or exercise the authority of a representative as described in 20 CFR 404.1710 and 20 CFR 414.1510.

NOTE: The sanctions described in GN 03970.010A (disqualification or suspension) are not exclusive. Aside from suspension or disqualification, a representative who engages in conduct that violates a provision of the Act may also be subject to incarceration, fines, and civil monetary penalties. See information on violations of the Social Security Act in Violations of the Social Security Act per GN 04105.000.

D. Definitions of violations and non-violations

1. Fee violations

a. Total unauthorized fee collection

A total unauthorized fee collection is when the representative collects his or her fee directly from the claimant, any auxiliary beneficiary, another individual (whether related or unrelated to the claimant or auxiliary beneficiaries), or through an erroneous fee payment, without the agency’s prior authorization.

NOTE: Payments to representatives by third-party entities are an exception to our general authorization requirement. For more information on fees that are not subject to our authorization, refer to Representative’s Fees not subject to Social Security Administration’s Authorization per GN 03920.010, and 20 CFR 404.1720(e) and 20 CFR 416.1520(e). For processing instructions, see the information on referrals of suspected fee violations, possible fee violations, and non-fee violations in GN 03970.017.

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 the representative collects an amount in excess of the fee we authorized. The amount over the authorized fee is a partial unauthorized fee collection. For processing instructions, see information on referrals of suspected fee violations, possible fee violations, and non-fee violations in GN 03970.017.

NOTE: If we pay a representative in error and he or she does not return the erroneous fee on receipt or following our request, the direct payment error may result in an unauthorized fee collection. This unauthorized fee collection could be “partial” or “total.” For example, the Processing Center (PC) or Field Office (FO) pays the representative duplicate payments of the authorized fee. The second payment is a total unauthorized fee collection. For processing instructions, see information on referrals of suspected fee violations, possible fee violations, and non-fee violations in GN 03970.017.

2. Non-fee violations

As reflected in the name, non-fee violations are unrelated to charging and collecting a fee. A representative commits a non-fee violation when he or she fails to comply with the affirmative duties, or if he or she violates any of the prohibited actions described in GN 03970.010B and GN 03970.010C, except for the fee rule in GN 03970.010C, to knowingly charging, collecting, or retaining a fee in violation of law or regulation. Some examples of non-fee violations are:

  • ignoring a request to submit certain evidence or obstructing the administrative process;

  • concealing evidence or medical sources;

  • deliberate and consistent tardiness or inexcusable delay for hearings;

  • disruptive, coercive, or threatening behavior to our staff or claimants;

  • conspiring to submit or knowingly submitting false documents;

  • disclosing the claimant’s or auxiliary’s private information without his or her prior consent; or

  • failing to conduct business with us electronically when we require it.

This list is not exhaustive. These are all non-fee violations. Some non-fee violations may also be criminal violations.

3. Non-violations

Non-violations are actions in conflict with our fee-charging rules, generally done because of lack of knowledge and without intent to violate our rules. In these cases, the representative often acts quickly to correct the issue before we intervene or on notification. For example, we pay a representative an unauthorized fee by mistake, but the representative repays the amount immediately after he or she learns that the payment was a mistake and before we take further action.

Non-violations usually occur when the representative is not at fault, or the questionable fee is not an actual violation of our rules.

E. Examples of non-violations

1. Collecting an authorized fee

A representative petitions for and we authorize a fee of $1,950. Withheld past-due benefits are only $1,640. Through error, we pay the representative directly the full fee of $1,950. The representative is not in violation of any of our regulations because the representative has not collected a fee in excess of what we authorized.

2. Direct payment of an authorized fee to an ineligible non-attorney, but not through fault of the representative

Daisy, the representative, correctly identifies herself as a non-attorney ineligible to receive direct fee payment. She does not submit either an SSA-1695 (Claimant’s Appointment of Representative), or an SSA-1699 (Registration for Appointed Representative Services and Direct Payment). We authorize a fee and directly pay the amount to her in error. Because the representative did not do anything to secure a direct fee payment and our payment was an administrative error, the representative has not violated our rules. However, we will refer those cases where a non-attorney took affirmative steps to secure a direct fee payment by wrongly claiming attorney or Eligible for Direct Payment Non-Attorney (EDPNA) status, per GN 03970.017 to OGC.

3. Requesting SSA’s authorization to charge a fee

Susie B., an appointed representative employed by a non-profit group, petitions for a fee in a Title XVI (Social Security Income (SSI)) claim. The organization’s bylaws however, prohibit the representative from petitioning us for a fee. Since the representative did not waive her right to charge and collect a fee and since we have no authority to enforce a non-profit organization’s rules (we only oversee the authorization and payment of fees), the representative may seek, receive authorization, and collect a fee without violating our rules.

4. Use of a Power of Attorney

Jay, a representative, submits a Power of Attorney (POA) to receive a fee on behalf of Nick Carraway, his former partner, for a claim Nick successfully represented at the hearing level. Jay also submits a fee petition with the POA. While we do not accept or process POAs or fee petitions that someone submits other than the appointed representative, Jay has not violated our rules. For more information on petitioning for a fee, refer to Petitioning for Approval of a Fee for Services Provided Before SSA per GN 03930.020.

F. Examples of violations of affirmative duties or engaging in prohibited conduct, actions subject to possible suspension or disqualification

While the following examples do not cover every situation, they illustrate situations where a representative appears to have failed to meet his or her affirmative duties or appears to have engaged in prohibited conduct. This conduct may lead to a representative’s suspension or disqualification and possibly criminal prosecution.

1. Failure to provide competent representation

Before the hearing John Rep, the appointed representative, submits the wrong evidence. He is ill informed about the process, and unfamiliar with Social Security laws. At the hearing, the representative is uninformed of the issue(s), the applicable laws and regulations, or the facts of the case. During the course of the hearing, it becomes evident that the representative is unprepared to ask questions, argues the wrong issue, or cites the wrong title or rule. The representative appears to have violated an affirmative duty by failing to provide the claimant with competent representative, as described in GN 03970.010B.

2. Collecting a fee without SSA’s authorization

Jane Jones, a representative of a claimant seeking Title XVI benefits, advises the claimant that she will charge the claimant 25 percent of retroactive (past-due) benefits (PDBs) if we allow the claim, but nothing if we deny the claim. The representative tells the claimant that she does not like all the “red tape” involved with direct payment of her fee from us and persuades the claimant to bring her first installment check to the representative's office for settlement of the fee. The representative never submits a fee agreement or fee petition to us and further tells the claimant that, “anyway, SSA routinely authorizes representative fees of 25 percent of retroactive benefits.” We allow the case on reconsideration, which results in the reopening of a prior denied claim and an award of retroactive benefits. The claimant pays the representative $3,500, per their agreement, which is 25 percent of her PDBs.

The representative has engaged in prohibited conduct because he or she knowingly charged, collected, and retained a fee without our authorization, as described in paragraph GN 03970.010C.

NOTE: We permit representatives to collect fee from a claimants (who are willing to do so), prior to receiving authorization from us as long as the representatives hold the money in trust or escrow accounts and do not withdraw the money until they receive our authorization. For more information on trust and escrow accounts, refer to GN 03920.025.

3. Indirect collection of a fee from the claimant without SSA’s authorization, third party payment

Joe Abel, a claimant, has a private insurance policy that pays him benefits when he is unable to work. The insurance company informs Mr. Abel that the terms of the policy require him to file for title II disability insurance benefits (DIB). The claimant receives assurance that the insurance company provides, at no charge, a representative to represent him before us. The claimant agrees to this representation.

Later, we award the claimant DIB. Tom Cain, the representative, informs us that he is waiving his fee in this representation. Following the terms of the policy, the claimant notifies the insurance company about the award of benefits. The insurance company then pays the representative $6,000 for representation of the claimant before SSA and deducts the same amount from the claimant's insurance policy benefits. The representative engaged in prohibited conduct because he or she knowingly violated our rules, which require that when a third party pays a representative’s fee, the claimant and any auxiliary beneficiaries must be free of liability directly or indirectly, as described in paragraph GN 03970.010C and in GN 03920.020. For the applicable regulatory language, refer to 20 CFR 404.1720(e) and 20 CFR 416.1520(e).

4. Indirect collection of a fee without SSA’s authorization and third-party payment by an individual

Pat, the appointed representative, informs the claimant that she will not receive a fee unless we allow the case and the case results in PDBs. The representative also advises the claimant that we must authorize her fee unless an entity or government agency is paying for the fee from its funds. To avoid delay in payment and “red tape” the representative suggests that the claimant’s uncle write a check from his company’s account to pay the fee and the claimant can later reimburse the uncle. The representative waives her fee from us. The representative receives a check from the uncle’s company as she requested. By collecting an unauthorized fee from the uncle, the representative has knowingly engaged in prohibited conduct described in paragraph GN 03970.010C. For applicable regulatory language, refer to 20 CFR 404.1720(e) and 20CFR 416.1520(e).

5. Failure to refund an unauthorized fee involving a duplicate fee payment by SSA

Jim, a representative, receives a properly authorized direct payment of $1,800 from withheld past-due benefits for his services representing a disability claimant before the Office of Disability Adjudication and Review (ODAR). Inadvertently, we certify duplicate payment of the fee to the United States Treasury. The representative receives the second check of $1,800 and deposits the check into his account. The FO or PC notifies the representative of the duplicate fee payment and seeks refund. The representative ignores the notices from the FO or PC to refund the duplicate payment or declines to repay. The representative is now knowingly retaining a fee in excess of the amount we authorized and the SSA technician should refer the representative to OGC for investigation, as noted in paragraph GN 03970.010C.

6. Charging and collecting an unauthorized fee based on a contract with a minimum fee

Joe Harper, a claimant, signs a fee contract with Mr. Sawyer, a representative, for representational services before us. This fee contract states that the “minimum” fee is $1,000. The fee contract does not state that we must authorize the fee. Later, the representative sends us a fee petition requesting $1,000 for representing the claimant. We authorize a fee for $700. The representative then seeks an additional $300 from the claimant. The representative violated our rules by:

  1. charging a fee that is $300 more than the fee we authorized;

  2. misleading the claimant concerning the minimum fee (in a fee petition matter, we do not determine a fee based upon a specific sum agreed to between the representative and the claimant); and

  3. failing to inform the claimant what we have to authorize the fee.

For the policy on the prohibited action, refer to paragraph GN 03970.010C.

7. Making an arrangement to charge, collect, or retain a fee for representational services directly from a claimant’s bank account

Bob Sid, a representative, asks a prospective client to:

  • allow the representative to sign checks against an account into which Social Security or Supplemental Security Income (SSI) benefits or payments are directly deposited;

  • have his or her Social Security or SSI benefits or payments directly deposited into an account that requires the representative to co-sign checks with the claimant before the claimant can withdraw the funds into that account; or

  • enter into an agreement that allows the representative to make electronic withdrawals from an account into which the claimant’s Social Security or SSI benefits or payment are directly deposited without obtaining the claimant’s express permission to make the withdrawals, after the funds are paid into the account.

If a representative is not eligible for direct payment of the authorized fee, collecting or arranging to collect the fee from directly deposited benefits or payments without obtaining the claimant’s express permission after the funds are in his or her account is not consistent with and violates the direct fee payment provisions of the Act and regulations. In order to remain compliant with the law, the representative must obtain authorization from the claimant to access the account after the Social Security benefits or SSI payments are paid into the account and prior to each withdrawal. Furthermore, a representative who gains control of the claimant’s Social Security benefits inappropriately may violate the provisions of sections 207 and 1631(d)(1) of the Act that prohibit the transfer or assignment of the right of any person to any future payments (benefits) under our titles. For more information about assignment of benefits and permission requirements refer to GN 02410.001D.2.

NOTE: If the representative collected a fee from the claimant without SSA’s prior authorization, then the representative is charging and collecting an unauthorized fee and may also be violating our regulations in 20 CFR 404.1720, CFR 20 404.1740(c)(2), and CFR 416.1540(c)(2).

8. Failing to file electronic requests for appeals as required

Representatives who are eligible for, and request direct payment are required to file certain appeals electronically, using our iAppeals portal.

a. Violations

Jim, an attorney, routinely submits paper appeal requests on medically denied initial claims or reconsiderations, but requests direct payment of fees on all cases. During a contact, he states that he does not like using our electronic system because it is unreliable and he prefers filling on paper. Jim is violating the affirmative duty to conduct business with us electronically by deliberately failing to file these appeals electronically.

Marilyn, an EDPNA, always asks her clients to submit a paper request for reconsideration or a hearing before she submits her SSA-1695, indicating she intends to seek direct fee payment. By routinely encouraging the claimant to file these appeals in paper and subsequently submitting documents for direct payment, the EDPNA is circumventing the affirmative duty to use our electronic systems and violating our direct payment rules.

b. Non-violations

Gloria, an attorney, files a paper appeal on a case excluded from iAppeals while requesting direct fee payment. For more information, see GN 03101.125B. Gloria has not violated our rules because our systems do not permit electronic filing of this appeal.

Karen, an EDPNA, files several paper appeals at once that she should have filed through iAppeals. Karen is requesting direct fee payment. After a brief contact, during which we remind her of the affirmative duty and possible sanctions referral, the representative apologizes and states she is new in practice and unware of the rule. She also promises to comply.

9. Failing to inform us about or submit required evidence

Olivia, a representative, advised her client Peggy about a claimant’s duty to inform us about, or submit, all known evidence that relates to whether or not she is blind or disabled. Peggy hands over to her representative a stack of medical records that includes copies of several test results.

The following day Olivia delivers the documents to the Social Security office, but removes a recent test that unfavorably relates to Peggy’s disability claim. Olivia violated SSA’s rules of conduct and standards of responsibility for representatives, as described in GN 03970.010B.1, because she failed to submit evidence that related to whether or not Peggy was disabled.

Kenneth, a representative, advised his client Doug not to fill out the Form SSA-3368-BK (Disability Report Adult) that Doug has received from us. When we contact Doug to request he fill out and return the form to ensure adequate development of the record, Doug, informs us that his representative advised him not to fill out the form. Kenneth violated SSA’s rules of conduct and standards of responsibility, as described in GN 03970.010B, because he hindered Doug’s compliance with the rule.

G. Examples of criminal violations and sanctions subject to criminal prosecution

While the following examples do not cover every situation, they provide a general idea of the types of situations that may indicate that a representative has engaged in prohibited conduct. Some actions that violate the Rules of Conduct and Standards of Responsibility for Representatives may also violate laws that have criminal penalties.

1. Knowingly make or participate in making a false statement

Making a false statement:

Trudy Jones, a mother, files for benefits on behalf of her 2-year old son, alleging the deceased number holder (NH) is the child's father. She is unable to establish the child's relationship to the NH or provide proof that the NH supported the child before his death, so we deny her claim at the initial level. The mother appoints a representative to appeal the unfavorable determination. The representative submits additional evidence in the form of four affidavits of persons alleging knowledge, which attest to the NH’s paternity of the child. We awarded the child as a surviving child. We later learn that a legal wife and two children are entitled to benefits on the earnings record of the deceased. During the adverse claim proceedings, the legal wife challenges the validity of the illegitimate child's paternity. An investigation reveals that the affiants only had casual acquaintance with the deceased.

The representative initiated conversation with all four affiants in a bar and ultimately persuaded each to prepare and sign the affidavits in return for $50 each. In this instance, the representative engaged in prohibited conduct, which could subject the representative to suspension or disqualification from practicing before us and possibly criminal penalties, including a fine and incarceration.

Making false representations:

Becky T., the claimant, approaches H. P. Finn, a representative, to inquire about filing a claim for Title XVI payments and about representation in this claim. After explaining all options, the representative asks the claimant if she wishes to file a Title XVI application and if she would like the representative to represent her in her claim. The claimant shakes her head hesitantly and replies that she would like to think about it. She promises to call back. After the claimant leaves, the representative applies online on the claimant’s behalf, using the information she provided and clicking to sign the application in her name. The representative engaged in prohibited conduct that could subject him to suspension or disqualification and possible criminal penalties, including a fine and incarceration, because he impersonated the claimant.

2. Unauthorized disclosure of beneficiary information

Jules Smith, a busy representative shares an office with Tim Nemo, an independent insurance agent. The insurance agent proposes to pay the representative a finder's fee for the name, address, and monthly benefit amount of each of her clients found entitled because of disability. The insurance agent intends to use these beneficiaries as prospective customers for a medical insurance plan he hopes to sell as a supplement to coverage provided by State and Federal programs. The representative agrees and provides the agent a list of such people without first obtaining consent from his clients. The representative engaged in prohibited conduct because he divulged information that he obtained from us, without the claimant’s written consent, as described in paragraph GN 03970.010C. This conduct could subject the representative to suspension or disqualification and possibly criminal penalties, including a fine and incarceration.


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GN 03970.010 - Rules of Conduct and Standards of Responsibility for Representatives - 12/07/2015
Batch run: 12/07/2015
Rev:12/07/2015