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 non-fee violation occurs when a representative fails to comply with an affirmative duty, or commits a prohibited action that is not a fee violation, as defined in GN 03970.010B and GN 03970.010C.

For procedures for development and referrals of suspected non-fee violations, see GN 03970.017.

A representative petitions for a fee of $1,950. Through error, we directly paid the full $1,950 amount to the representative, even though we only authorized $1,500 for the representative's fee. Once we realized the error, we immediately sent a notice to the representative requesting refund of the excess amount. If the representative does not return the excess amount after we notify him or her of it, the representative is knowingly retaining an amount in excess of the authorized fee in violation of our rules.

A representative submits a POA to receive a fee on behalf of his former partner. The representative also submits a fee petition for his former partner's work along with the POA. While we do not accept or process a POA or fee petition from anyone other than the appointed representative (i.e., the former partner), the representative has not violated our rules by requesting authorization from us collect a fee on behalf of his former partner through a POA.

However, if the representative attempts to collect or actually collects his former partner's fee without our authorization, he may be in violation of our rules. For more information on petitioning for a fee, see GN 03930.020.

A representative enters into an agreement with a claimant allowing the representative to charge a fee equal to 25 percent of the claimant's retroactive (past-due) benefits (PDBs) if we allow the claim, or nothing if we deny the claim. The representative tells the claimant that she wants to avoid the "long delays" involved with our direct payment of her fee. The representative tells the claimant that if we award benefits to her, she should bring the first check from us to the representative's office to pay the representative's fee. We approve the claim on reconsideration, which results in the reopening of a prior denied claim and an award of retroactive benefits. The representative does not submit a fee agreement or fee petition to us and assures the claimant that we "routinely authorizes representative fees of 25 percent of retroactive benefits." The claimant pays the representative a fee consisting of 25 percent of the PDBs. The representative has engaged in prohibited conduct because she knowingly charged, collected, and retained a fee without our authorization.

NOTE: We permit representatives to collect money from claimants prior to receiving authorization from us as long as the claimant willingly enters into the agreement and willingly deposits the money in the trust or escrow account, and the representative holds the money in a trust or escrow account and does not withdraw the money until after receiving our authorization. For more information on trust and escrow accounts, refer to GN 03920.025.

A representative receives a properly authorized direct payment of $1,800 from withheld past-due benefits for his services representing a disability claimant before us. Inadvertently, we certify duplicate payment of the fee to the U.S. Treasury. The representative receives a second check for $1,800 and deposits it into his account. After the field office (FO) or payment center (PC) sends a notice to the representative notifying him of the duplicate fee payment and requests a refund, the representative does not act on the notice and does not refund the duplicate payment. The representative has engaged in prohibited conduct because he has knowingly retained a fee in excess of the amount we authorized.

A representative enters into a signed fee contract with a claimant, stating that the "minimum" fee for his services is $1,000. The fee contract does not state that we must authorize this fee. After we approve the claim, the representative sends us a fee petition requesting $1,000 for his services. However, we only authorize a fee for $700, and the representative then seeks the additional $300 from the claimant, based on the fee contract. The representative has engaged in prohibited conduct because he charged a fee in excess of the amount we authorized, misled the claimant concerning the minimum fee, and failed to inform the claimant that we have to authorize any fee.

The claimant has a private insurance policy that pays her benefits when she is unable to work. The insurance company informs the claimant that the terms of the policy requires her to file for Title II Disability Insurance Benefits (DIB). The insurance company assures the claimant that it will provide her with a representative to assist her with her claim at no charge.

Later, we award the claimant DIB benefits. The representative, who contracted with the insurance company to represent the claimant, informs us that he is waiving his fee directly or indirectly from the claimant and any affected auxiliary beneficiaries. Following the terms of the policy, the claimant notifies the insurance company about the award. The insurance company then pays the representative a fee for his representation of the claimant before us and deducts the same amount from the claimant's insurance policy benefits. The representative engaged in prohibited conduct, because he knowingly violated our rules, which state that when a third party pays a representative's fee, the claimant and any affected auxiliary beneficiaries must be free of liability directly or indirectly, as described in GN 03970.010C and GN 03920.020; See also 20 CFR 404.1720(e) and 416.1520(e).

A non-attorney representative who is not eligible for direct payment by us, asks a claimant to agree to one of the following:

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  Allow the representative to sign checks against an account into which SSA directly deposits DIB or SSI payments;

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  Request his or her DIB or SSI payments be directly deposited into an account that requires the representative to co-sign checks with the claimant before the claimant can withdraw funds from that account; or

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  Enter into an agreement that allows the representative to make electronic withdrawals from an account into which SSA directly deposits the claimant's DIB or SSI payments without the need to obtain the claimant's express permission for each withdrawal.

All three options violate our rules. The representative is 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. Under our rules, the representative cannot have a financial interest in the bank account where we deposit the claimant's DIB or SSI payments. A representative must obtain authorization from a claimant to access a bank account after we pay DIB or SSI payments into the account and before each withdrawal.

If the representative collected a fee from the claimant without our prior authorization, then he has charged and collected an unauthorized fee and also violated our regulations under 20 CFR 404.1720, 404.1740(c)(2), 416.1520, and 416.1540(c)(2).

A representative who inappropriately gains control of the claimant's Social Security benefits may also be in violation 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.

At the hearing, the representative is uninformed about a relevant issue, the applicable laws and regulations, and/or the facts of the case. The representative is also unprepared to ask questions or argue the issue, and he cites irrelevant regulations and rules. The representative has violated his affirmative duty to provide the claimant with competent representation.

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

A representative routinely submits paper appeal requests on medically denied initial claims and reconsideration claims, but requests direct payment of fees on all cases. The representative advised us that he does not like using the Disability Appeal (iAppeals) portal because it is unreliable and he prefers filling out information on paper. The representative has violated the affirmative duty to conduct business with us electronically by deliberately failing to file these appeals electronically.

A representative always asks her clients to submit a paper request for reconsideration or a hearing before she submits her Form SSA-1696, indicating she intends to seek direct fee payment. By routinely requesting the claimants to file these appeals in paper and then requesting direct payments, the representative is circumventing the affirmative duty to file certain appeals electronically and is violating our direct payment rules.

Representatives who are eligible for and request direct payment of fees are required to use the ARS system to access and obtain all information and evidence in claims with certified electronic folders pending at the hearing or the Appeals Council levels.

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  A representative has 150 disability claims pending at the DDS level and requests CD copies of all the claims files. Even if this representative requests direct payment on all of her cases, she is not in violation of our rules because she is not required to use the ARS system at the DDS level. However, after receiving several initial and reconsideration denial determinations, the representative requests hearings for her clients and again requests CD copies of all the files. Unless a limited exception applies (see GN 03970.010B.4, NOTE 2), the representative has now violated our mandate to use the ARS system to access the claim files.

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  Five claimants have Social Security claims pending at the Appeals Council level and have appointed the same representative. Each claimant separately writes us to request CD copies of their claim files. The claimants are not under the mandate to use ARS and we will provide them with the requested copies of their files. However, if claimants affiliated with a particular representative frequently request CD copies of their files, the representative may be in violation of our mandate to use the ARS system to access the claim files when the circumstances suggest that the representative is directing this activity to circumvent his or her obligation to use the ARS system.

A representative advises her client about his duty as a claimant to inform us about, or submit, all known evidence that relates to whether or not he is blind or disabled. The claimant gives his representative a stack of medical records that includes copies of several test results. The following day, the representative uploads the documents to the claimant's electronic file, but removes a recent test containing normal findings, as she believes this evidence would unfavorably affect her client's disability claim. The representative has violated our rules because she failed to submit all known evidence that pertains to whether the claimant is blind or disabled.

A representative advises his client to "not worry" about filling out the Form SSA-3368-BK (Disability Report - Adult) he received from us, stating that we oftentimes do not even look at that form. The representative violated our rules because he suggested non-compliance with our request for information or evidence.

A representative is chronically late in submitting required reports because her office is short staffed. She also routinely submits late filings and requests for good cause. The representative's late submissions has delayed the case processing for a number of her clients. The representative violated our rules by unreasonably delaying or causing to be delayed the processing of these claims because her lack of staffing is not good cause for missed deadlines under 20 CFR 404.911(b) and 416.1411(b).

On the day before a scheduled hearing, a representative sends a letter to us and the claimant, stating that he is withdrawing as the claimant's representative in the case. In the letter, the representative provides no reason for his withdrawal. The next day, the claimant arrives for the hearing, but informs the administrative law judge (ALJ) that he does not feel comfortable continuing without a representative. The ALJ postpones the hearing to allow time for the claimant to obtain a new representative. The representative has violated our rules because he withdrew his representation after the hearing was scheduled and failed to identify extraordinary circumstances for the withdrawal, which disrupted our processing of the claimant's case.

Soon after appointing her representative, a claimant provides the representative with relevant medical and work history evidence that she needs to submit to us. The representative makes no effort to provide the evidence to us and instead sits on the evidence for six months, finally providing it to us only two business days before the date of the claimant's hearing. The representative has violated our rules because he failed to provide us the required evidence "as soon as practicable." Moreover, as the representative did not inform us about or submit this evidence at least five business days before the date of the scheduled hearing, the ALJ may decline to consider this evidence, see Social Security Ruling 17-4p.

A disability applicant receives unreported cash payments for housecleaning work she routinely does for several families in her neighborhood. Her representative advises her not to report this work in her Social Security application because her work and earnings will negatively affect her claim for disability. The representative has violated our rules because he participated in the making or presentation of false evidence about the claimant's work and earnings.

The claimant owns a brand new automobile she won at a contest and stores the automobile at her aunt's house in a different state. The claimant knows that the asset will count as a resource and decides not to mention it on her SSI application. Her representative agrees with the claimant that this is a good idea, and the claimant continues to conceal this asset. The representative has violated our rules because he participated in the making or presentation of false or misleading statements about the claimant's resources.

A representative referred a claimant to a doctor for a medical examination. A few days later, the doctor sends the report of the examination to the representative. The representative submits the medical report to us the following day, but does not disclose in writing that she referred the claimant to the doctor. The representative has violated our rules by failing to inform us of the referral.

A claimant's representative who is the managing partner at a law firm asks an associate attorney to represent the claimant at the administrative hearing. At the administrative hearing, the associate attorney submits an SSA-1696 and fails to disclose that her State Bar suspended her license based on attorney misconduct. The managing partner, who is the associate attorney's supervisor, is aware of the suspension and the false statement on the SSA-1696, but does not disclose either to us, as he believes the suspension did not affect the associate attorney's ability to provide competent representation at the hearing. The associate attorney violated our rules of conduct and standards of responsibility because she made a false statement to us and did not immediately disclose the suspension to us. The managing partner also violated our rules because he did not ensure the individual assisting him complied with our rules of conduct and standards of responsibility, and he did not take remedial action when he learned of the violations.

A mother files for benefits on behalf of her two-year old son, alleging that a 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 four affidavits of persons alleging to have first-hand knowledge of the NH’s paternity. We award the child survivor’s benefits, but later learn that the affiants only had casual acquaintance with the NH, had no knowledge of the paternity issue, and that the representative persuaded them to sign the affidavits in return for $50 each. The representative engaged in prohibited conduct by knowingly making false statements and presenting false evidence, subjecting him to suspension or disqualification from practicing before us and possible criminal penalties, including a fine and incarceration. See section 208 of Act.

A claimant calls the FO to state that a representative filed a claim on her behalf without her authorization. The representative had submitted an online first-party application on the claimant's behalf following a phone call in which the claimant only inquired about the possibility of filing for SSI. The representative impersonated the claimant and engaged in prohibited conduct that could subject him to suspension or disqualification and possible criminal penalties, including a fine and incarceration. See section 1106 of Act.

A representative shares an office with 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 his clients to whom we award benefits. The agent sees these beneficiaries as prospective customers for the medical insurance plans he is selling that will supplement the coverage provided by State and Federal programs. The representative agrees to the proposal and, without obtaining consent from any beneficiary, he provides a list containing personal information of his clients. The representative engaged in prohibited conduct because he divulged information that he obtained from us, which contains personal information of our beneficiaries, without any beneficiary’s written consent. See GN 03970.010C. This conduct could subject the representative to suspension or disqualification from practicing before us, and possibly criminal penalties such as fine and incarceration, see section 1106 of Act.

After we approve $3,000 in attorney fees for a successful Title II claim, a representative contacts her clients to collect the fee from the beneficiary directly. The representative demands $4,000 from the beneficiary, stating that the fee approved by us does not truly represent the time and effort she had put into this case. The representative engaged in prohibited conduct by charging (and potentially collecting and retaining) more fee than we authorized, subjecting her to possible suspension or disqualification from practicing before us and possible criminal penalties based on this conduct, see section 206 of Act.