TN 9 (12-15)
GN 03970.017 Referrals of Suspected Fee Violations, Possible Fee Violations, and Non-Fee Violations
A. Introduction to referrals of suspected violations
The Field Office (FO), Payment Center (PC), Disability Determination Services (DDS) and the Office of Disability Adjudication Review (ODAR) may discover fee, possible fee, and non-fee violations. For examples and definitions of violations and non-violations, see GN 03970.010.
The FOs and PCs are responsible for developing and documenting the evidence to support alleged violations and for assisting the Office of the General Counsel (OGC) with any additional development after the referral. DDS and ODAR staff should follow their internal procedures to collect supporting information and refer an alleged violation to the appropriate office.
NOTE: If we directly pay a representative a fee in excess of the authorized fee, the error may result in a direct payment fee violation if the representative does not return the excess fee on receipt or following our request. Process these violations per the instructions in GN 03970.025.
To develop and refer a representative for possible fee violations use the instructions in GN 03970.010B or GN 03970.010C. For information on Excess Representative Fee Payments, refer to GN 03920.051.
NOTE: Do not use the instructions in GN 03970.025 to process direct payment error fee violations made by a non-attorney representative who is not eligible for direct payment and who improperly obtained direct payment. For more information on processing direct payment error fee violation, see GN 03970.025.
B. Procedure for FO development and referral of fee and possible fee violations
1. Develop the fee violation as fully as possible
Fee and possible fee violations are those related to charging and collecting a fee. A fee violation usually occurs when a representative collects a fee that we did not authorize or collects a fee in excess of the amount we authorized. However, there are other examples of a fee or possible fee violation in GN 03970.010.
When a question of a possible violation arises, use common sense and good judgment. In some situations, a suspected violation might be a simple misunderstanding that our technician can resolve with a contact. For example, a non-attorney selects the wrong block on the SSA-1696-U4 (Appointment of Representative) and mistakenly presents himself as an attorney. After a brief phone call, the representative sends an amended SSA-1696 to correct the error, and our technician determines that the error was unintentional.
At other times, a contact may even rectify the violation. For example, a representative received $1000 in excess of the fee we authorized. Upon notification by our technician, the representative agrees to return the excess fee. In this case, and other suspected fee violation cases (For example, direct payment errors, unauthorized fees, fees in excess of the authorized amount), allow the representative reasonable time (or an amount of time agreed to) to correct the problem. If at the end of that period, the representative has not taken any action to correct the problem, develop and refer fee and possible fee violations following the instructions outlined in this subsection. In those cases where limited information is available, collect as much information as possible. For sample notice language for duplicate or excess payments, refer to GN 03970.025C.
NOTE: If the suspected violation is criminal or involves fraud do not contact the representative. For a possible non-fee violation (For example, representative failed to provide competent representation), refer to GN 03970.010D.1. or GN 03970.010E.1, regarding whether to contact the representative.
However, you may contact a representative if the alleged violation relates to the requirement for electronic filing or submission of evidence. You may do so prior to referring the case to OGC to inform the representative of our rules and to ascertain whether the alleged violation was a deliberate act or an oversight. When you believe that a representative has violated the duty to assist the claimant to provide required evidence, you can refer the matter to OGC pursuant to GN 03970.010D or GN 03970.010E.
Do not try to determine whether a representative’s conduct fits the exceptions in GN 03970.010B.2. IMPORTANT: Keep the information in a separate file. Never store referral development in the claims file.
a. Request the claims file and proof of payment (check or direct deposit)
If there is a paper folder and it is not in the FO, request the claim file. If the file is a certified electronic file (CEF), reference the eView or Claims Folder Records Management System (CFRMS), or, in the office to which you are referring, the case has no eView access, create a compact disc (CD) copy of the file according to the instructions in DI 81001.035.
b. Request proof of payment
In cases where the payment of the fee is material and we have paid the representative directly, you may view the Treasury Check Information System (“TCIS”), but do not use it to obtain proof of payment. OGC will obtain proof of payment directly from the Department of Treasury.
In cases where the claimant or beneficiary has paid the representative directly, ask the claimant or beneficiary to provide you with proof of payment of the unauthorized fee (For example, cancelled checks, credit card receipt, billing statement from the representative, money order receipt, or a letter or note from the representative mentioning the payment).
c. Complete form SSA-5002 (Report of Contact (RC))
Complete a report using an SSA-5002. Include a detailed description (Such as, answer questions such as who, what, when, where, and how) of the violation. Use the following instructions to complete the report.
Identify who (claimant, representative payee if applicable, representative, and witnesses) is involved in or is a witness to the event that led to the violation.
Explain the events (actions on the part of the representative and the claimant) that led to the violation. For the different violation types, refer to the examples in GN 03970.010. The following bulleted list are examples of the type of information needed in the explanation:.
Actions on the part of the representative include actions such as requesting and receiving unauthorized fees;
Actions on the part of the claimant include receiving the request for payment, paying the fee, and receiving a receipt as proof of payment of the unauthorized fees;
List what led the claimant to question the fees that his or her representative charged (For example, the fee notice or another person’s input);
Identify whether the fee was in addition to any fee(s) that we already authorized or if fee collection was completely unauthorized;
If we authorized the fee, indicate whether we authorized it through a fee petition or a fee agreement;
Determine and document whether the representative collected any money to recover costs or expenses; and
Determine and document whether the representative had a trust or escrow, agreement with the claimant, or deposited any of the fee into a trust or escrow account. For more information on escrow accounts, refer to GN 03920.025.
Identify, as described in the following list, when the events took place:
List the date the claimant received the billing statement or request for payment of the unauthorized fee(s);
If the fee was paid, determine the date the claimant or SSA paid the unauthorized fee to the representative; and
Indicate when the claimant realized that the appointed representative charged him or her an unauthorized fee.
Identify where the events took place (For example, the claimant’s home; the representative’s office; a bank or check cashing facility; through the mail).
Explain, as described in the following list, how the events took place:
How much did the representative charge;
How did the representative request the unauthorized fee (For example, orally or a billing statement);
How much did the claimant pay;
If paid, how did the claimant pay (For example, cash; check; money order; credit card; or provided a personal service for the representative);
Who did the claimant pay; and
How did the representative acknowledge payment (For example, issuing a receipt, sending a letter or note mentioning the fee payment, or orally. If orally, is there a voicemail message on the claimant’s or beneficiary’s phone.)
Identify Claimant, beneficiary, and representative
List the names, addresses, and telephones number of the representative, claimant, or beneficiary.
List the name, address, and telephone number of any witness, indicating his or her relationship to the claimant, beneficiary, or the representative.
Identify FO point of contact
List the FO’s point of contact, including the contact’s name, title, and telephone number (with the extension, if applicable).
d. Obtain copies of all documents
Obtain copies of any documents and any other evidence not already mentioned that support the “who, what, when, where, and how” that you provided. For example, claimants or beneficiaries often have letters or notes from the representative or voicemail recordings, so provide a copy of the written communication or make a note of the oral communication on an SSA-5002.
e. Obtain signed statements, if available
Obtain signed statements from any individual with direct knowledge of the facts involved, including the claimant, beneficiary, payer, and any other witnesses. Do not contact the representative for a statement. The statements should provide all details related to the events leading to the fee violation. If an individual will not cooperate or sign a statement, record this information on an SSA-5002.
f. Documenting the claimant-representative relationship
If available, include in the file a copy of the notice of appointment (For example, an SSA-1696-U4 or another signed written equivalent); written and signed documentation of a fee arrangement between the parties; or documentation that we recognized the individual as the claimant’s representative such as a copy of the SSA-L1697 (Notice to Representative of Claimant Before the Social Security Administration).
2. Request management review
Once you complete the development of the violation, request that a member of management review the file to ensure that we fully developed the violation.
Management should document the review and approval of the referral on an SSA-5002 before forwarding the case to the next level.
3. Referral after management review is complete
Place the development, claim file or CD, and, if applicable, proof that SSA has already offered the representative the opportunity to correct the suspected fee violation into an envelope. Forward this information to the servicing regional Center for Programs Support (CPS) with jurisdiction. When CPS finishes reviewing the case, CPS refers the case to the appropriate regional OGC office. See the policy for suspected criminal violation referrals in GN 03970.016. Refer any additional development or inquiries via email or via regular mail to the appropriate OGC office using the electronic or physical addresses listed in GN 03970.070.
If the claim is a paper file, complete any adjudicative or post adjudicative FO actions that you might need prior to forwarding the claims file.
If you are unable to retain the original documents the claimant provided (check, receipt, or bills), make clear and readable certified copies of these documents. If necessary, OGC will use it as evidence at the sanctions proceeding.
The Office of Central Operations (OCO) must follow the procedures listed for the Processing Centers, but should forward their referrals to the Office of General Law (OGL) in OGC using the electronic or physical addresses listed in GN 03970.070, rather than to a regional OGC.
Headquarters components other than OCO must refer the case to the CPS in the servicing regional office.
DDS offices refer their cases to the appropriate regional contact following internal procedures.
ODAR offices refer their cases following the Referring a Suspected Violation instructions in HALLEX I-1-1-5.
C. Procedure for PC development and referral of fee and possible fee violations
1. Develop the fee violation as fully as possible
Use the following instructions to develop and refer fee and possible fee violations:
If the claim file is not in the PC, request it. If the file is a CEF, create a CD copy of the file only if the referring office does not have access to the eView. (For more information copying a CEF to CD, see DI 81001.035).
If the payment of the fee is material to the development, include a note in the file but do not request proof of the payment (Such as, checks or direct deposit). For more information, refer to paragraph GN 03970.010B.1.
Ask the claimant or beneficiary to provide you with proof of payment of the unauthorized fee, if he or she paid directly. Examples of such proof can be:
credit card receipts,
money order receipts,
a receipt from the representative, or
a letter or note from the representative mentioning the payment.
To complete a report about the violation, follow the instructions in paragraph GN 03970.010B.1.c.
2. Request management review
Once you complete development, request that the assigned reviewer review the case to ensure that development of the violation is fully developed.
3. Management review is complete
Once the management review is complete, place the development (claim file or CD, and, if applicable, proof that we already offered the representative the opportunity to correct the potential fee violation), into an envelope and forward it to the Operations Support Branch (OSB) for your PC. Refer any further development to OSB until the OSB refers the matter to OGC. After that, refer any additional development or inquiries via email to the appropriate Office of the Regional Chief Counsel (ORCC) for PSCs (or OGL) for OCO, using the electronic addresses in GN 03970.070A.
The PC is responsible for assigning an individual to review violation referrals to ensure that development is complete. OCO (or other headquarters components (HQs)) does not make referrals to ORCC. HQs components must make the referrals to the OGL using the electronic or physical addresses listed in GN 03970.070.
D. Procedure for FO development and referral of non-fee violations of the rules of conduct and standards of responsibility for representatives
Non-fee violations are unrelated to charging and collecting a fee. Examples of non-fee violations include, among others:
being disruptive, coercive, or threatening to our staff or claimants,
being deliberately and consistently tardy or inexcusably delayed for hearings,
obstructing the administrative process,
conspiring to submit or knowingly submitting false documents, or concealing or altering evidence;
impeding claimant’s attempts to provide all evidence relevant to the issue of disability, as required under our rules;
failing to conduct business with us electronically when we require it;
failing to help the claimant obtaining evidence or information as required; or
disclosing the claimant’s or auxiliary’s private information without his or her prior consent.
Some non-fee violations, like the last example, may also qualify as criminal violations.
1. Develop and refer non-fee violations
Use the following instructions to develop and refer a non-fee violation:
If the violation involves a particular claim and a paper claims file exists, request the claims file if it is not in the FO. If the file is a CEF, create a CD copy of the file. For instructions on how to copy a Certified Electronic Folder (CEF) to CD, refer to DI 81001.035.
Use the instructions in GN 03970.010B.1.c., as a guide to complete a report on an SSA-5002 about the violation.
If applicable, obtain copies of other pertinent evidence, such as a State Bar notice of disbarment or suspension of a representative, or any document proving the disbarment (For example, a local newspaper article announcing the disbarment).
Obtain copies of any documents and any other evidence not already mentioned that support the “who, what, when, where, and how” you provided in your report.
Obtain signed statements from the claimant, beneficiary and any possible witnesses detailing the events leading to the non-fee violation. If any individual refuses to cooperate or sign a statement, document this information on an SSA-5002.
Contact a representative about a failure to use SSA’s electronic services when required follow the instructions in GN 03970.010F.1. You may also contact suspected violators of our duty to submit evidence, as described in GN 03970.010B.2. Obtain the non-submitted evidence or evaluate the representative’s explanation for not submitting the evidence to determine whether to refer the case to OGC. If you contact the representative for either reason, explain the relevant policy and document the representative’s explanation on a report of contact.
Do not contact the representative for a statement regarding any other non-fee violation.
Never store any referral development in the claims file.
2. Management review
Once development is complete, ask management to review the file to ensure that the violation is fully developed.
3. Management review is complete
Once the management review is complete, place all development and the claims file or CD into an envelope and forward the envelope to the regional Center for Programs Support (CPS) with jurisdiction. Refer any further development to the CPS. After CPS refers the matter to the appropriate OGC office per GN 03970.016A, you can send any evidence or additional development directly to OGC using the electronic or physical addresses in GN 03970.070.
NOTE: If you need the paper claims file to complete any adjudicative or post adjudicative action in the FO, complete the actions prior to mailing the file.
E. Procedure for PC development and referral of non-fee violations of the rules of conduct and standards of responsibility for representatives
1. Develop and refer non-fee violations
Use the following instructions to develop and refer all non-fee violations:
If a “paper file” is involved and it is not in the PC, request the claims file. If the file is a CEF, create a CD copy of the file. (For instructions on how to copy a Certified Electronic Folder (CEF) to CD, see DI 81001.035)
As a guide on how to complete a report about the violation, see paragraph GN 03970.010B.1.c.
If the referral needs additional development, request that the FO complete the development and forward it to the PC per GN 03970.010D.1.c.
2. Request management review
Once development is complete, request the assigned reviewer to review the file, to ensure that the referral is complete and fully developed.
3. Management review is complete
Once the assigned reviewer completes the review, place the development and claims file or CD into an envelope and forward it to the CPS (OCO) or OSB (PSC) of jurisdiction.
Refer any further development to CPS and OSB. After CPS or OSB refers the matter to OGC, refer any additional development or inquiries via email to the appropriate OGC office using the electronic or physical addresses listed in GN 03970.070.
F. Referring violations of the requirement to use our electronic services
1. iAppeals requirement
We usually process violations of the electronic services requirement the same way we process other non-fee violations. There are special considerations for these alleged violations. The agency wants to provide attorneys as well as Eligible for Direct Pay Non-attorneys (EDPNAs) with reasonable opportunities to follow our rules related to electronic services. FO personnel using good judgment and reason, and with management approval, may refer representatives to OGC for sanctions after reminding the representatives of the requirement. To determine whether to refer a representative, consult the examples in GN 03970.010. Document your contacts on an SSA-5002. Please note, there is no need to refer the case to OGC if it appears that the representative’s failure to use the required electronic service was:
2. iAppeals requirement referral procedure
To develop the referral, follow the procedures in GN 03970.010B.1.c. (in this section), and also take the following actions:
Compile all the written reminder notices and other records documenting communication with the representative, such as the standard warning letters in paragraph GN 03970.010F.3, as well as any written notes documenting conversations with the representative, in person or by telephone.
Print out the Certified Electronic Folder (CEF) or make copies (paper folder) of the appointment and the representative’s request for direct payment (For example, the SSA-1696 and SSA-1695.
Compile all supporting evidence (For example, notations on the developmental screens) and any written responses received from the representative following the FO’s written reminders.
Prepare an SSA-5002, and include a detailed description of why you think the representative has violated the electronic filing rule, along with the names (First/Last) and Social Security Number (SSNs) of the cases used to substantiate the referral. Include the representative’s SSN or RepID, if known.
Do not annotate any claim systems. Keep this documentation in a separate paper file in the FO. Either refer the representative to OGC for an investigation within two years, or destroy the file.
If OGC needs proof that the representative actually received payment in the case, develop as described in GN 03970.010B.1.b, and forward this information to OGC to associate with the prior referral.
Even after the initial referral to OGC, continue to document any new instance of the representative’s failure to file certain appeals electronically, and submit them to OGC on a flow basis.
NOTE: In situations where the representative may have encouraged the claimant to file a paper appeal himself, but later submits a request for direct payment, you should contact the representative to remind him or her of the electronic filing requirement. If this pattern continues, and it is apparent that the representative deliberately ignores the rule to submit the reconsideration or hearing request online, then you should issue, with management approval, a written warning letter to the representative, using the language in GN 03970.010F.3. Include in the warning letter the names of the specific cases involved so that, if needed for a future sanctions referral, we will have documentation of the cases.
3. iAppeals requirement sample warning letter
The following is a sample “warning letter” of notification of possible action for non-compliance with the electronic filing requirement. DPS contains a sample of this letter, under the same name, “iAppeals Requirement Warning Letter” in the “general” category under “local” source.
Dear Mr. /Mrs. /Ms. [insert representative’s name]:
We are writing to remind you that you must use our online appeal service. Our Rules of Conduct and Standards for Responsibility for representatives require you to use our Internet Disability Appeals application when you request direct fee pay on certain Social Security cases. These cases include medically denied Title II or Title XVI initial claims and reconsiderations.
It has come to our attention that you are not complying with this mandate. Noncompliance may result in your suspension or disqualification.
We ask that you begin to file an electronic appeal of a medical denial when you request or intend to request direct payment of your fee for a case. This requirement was published in the Federal Register at 77 FR 4653, and was effective March 16, 2012. You can find our Internet Disability Appeals application on our website at http://www.ssa.gov. Select “Appeal a Decision” under the “Benefits” tab.
Below we list some of your cases in which you should have, but did not use our Internet Disability Appeals application:
[Insert Number Holders’ first and last names of all identified cases]
If we continue to receive improperly submitted appeal requests from you, we will refer the matter to our Office of General Counsel for further investigation and possible action.
If you have any questions or wish to respond to this notice, please write to us or contact [us/if desired insert FO specific employee name] at [insert phone number.]
Field Office Manager [optional]
DI 81001.030 Claimant or Representative Requests a Copy of the Claim Folder
DI 81001.035 Copying a Certified Electronic Folder (CEF) to CD
GN 02406.007 Allegation of Nonreceipt of Direct Deposit
GN 02406.140 Photocopy Requests
GN 03970.011 Unqualified Non-attorney and Attorney Representatives
GN 04120.015 Documenting the Interview with Tipsters, Witnesses, and Suspects