TN 17 (02-02)

SI 02220.014 Reporting Title XVI Overpayment Debts to Credit Bureaus

A. Policy

1. Authority

The Foster Care Independence Act (FCIA) of 1999 authorized SSA to report certain delinquent title XVI overpayment debts to credit bureaus.

In addition, the Fair Credit Reporting Act (FCRA) contains provisions on credit bureau reporting, including handling consumer disputes about information reported to credit bureaus by SSA and other credit reporting entities (see SI 02220.014D.1. for more information about consumer disputes).

2. General Description of Credit Bureau Reporting

Credit bureau reporting is the posting of a debt to an individual's credit record. SSA uses credit bureau reporting as a way of influencing a debtor to repay a title XVI debt.

SSA sends information about the debt/debtor to the national credit repositories, which are the largest holders of credit data. The credit repositories then provide the information to the smaller credit bureaus across the country. An SSA debtor could be denied a loan or credit based on the posting of an unrecoverable SSA debt on the credit report.

3. Criteria for Selecting Title XVI Debts for Credit Bureau Reporting

SSA's automated systems select certain delinquent title XVI debts for credit bureau reporting. The following criteria apply:

  1. The debtor must have attained age 18 before the debt was incurred;

  2. The debt must be considered to be “unrecoverable” under regulations issued by the Commissioner of Social Security (see SI 02220.013B.1. for definition of the term “unrecoverable”);

  3. The debt must be owed by a person who is no longer entitled to receive Supplemental Security Income payments

  4. The debtor must be alive;

  5. The debt must be $25.00 or more.

  6. The debt must be delinquent for no more than 6 years and 6 months (see SI 02220.012B for the definition of the term “delinquent”).

B. Process

1. Debtor Selection

Each month, SSA's systems select title XVI debtors whose debts have reached unrecoverable status for credit bureau reporting.

NOTE: If the debt has not been reported to the credit bureau, the presence of a K TAC would prevent it from being reported.

2. Debtor Notification

SSA sends an automated due process notice to the selected debtors, telling them that SSA intends to report their debts to credit bureaus. The notice tells the debtors that the following specific information will be reported:

  1. Debtor's name, address and Social Security Number;

  2. Date of birth;

  3. Date the overpayment became delinquent (See SI 02220.012B.2. for definition of the term “delinquent”);

  4. Date of last payment, if any; and

  5. Past due balance of the overpayment.

NOTE: SSA sends one automated notice to inform the debtor about the proposed referral to Treasury for TOP and proposed credit bureau reporting. This notice addresses TRO, administrative offset of Federal payments and credit bureau reporting. The same repayment options and due process rights described in SI 02220.012A.4. are offered for credit bureau reporting and for administrative offset. (See SI 02220.013 for administrative offset to collect title XVI debts). All ECO notices sent November 2015 or later will be stored in ORS. For all ECO notices sent prior to November 2015 you can view the ECO master query. For additional information on the ECO master query, see MSOM DMS 014.007.

3. Credit Bureau Reporting

If all criteria for credit bureau reporting continue to be met, SSA's systems report the debtor/debt information after the later of:

  1. The expiration of 60 days from the date of the notice; or

  2. The date on which SSA sends the debtor a decision on any request for review of the debt or waiver received during that 60-day period.

4. Updates to Credit Bureau Reports

SSA is required to keep its debtor/debt information updated with the credit bureaus. SSA's systems perform the updates each month. SSA reports updated information such as repayments, changes of address and protests received after the debt is reported to the credit bureaus.

NOTE: If a debtor becomes reentitled and benefit withholding resumes, SSA's systems will automatically update the credit bureau with the collections and the most current debt balance.

C. Procedure - Handling Debtor Inquiries/Protests During 60-day Due Process Period

Debtors will react to the 60-day due process notice in a variety of ways. This section provides the procedures for how to handle the debtor reactions most likely to occur after the due process notice is sent and before the debt is reported to the credit bureaus.

1. Request for Explanation of Overpayment

Follow procedure in SI 02220.012E.1.

2. Request for Waiver

Follow procedure in SI 02220.012E.3. and SI 02260.001.

NOTE: If a waiver request is pending at the end of the 60-day due process period, the debt will not be reported to the credit bureaus.

3. Request to Inspect SSA's Records

Follow procedure in SI 02220.012E.4.

4. Request for Installment Payments

Follow SI 02220.012E.5. and SI 02220.025.

5. Debtor Objects to Collection of Debt

  1. Protest Involves Request for Review of the Debt or the Legality of Collection

    If the debtor alleges that he or she does not owe all or part of the balance stated in the notice or that SSA has no legal right to collect the debt or that there is no overdue debt, advise that if he or she wishes us to review these findings before we report the debt to the credit bureaus, we must receive evidence to support the allegations within 60 days from the date of the due process notice. Follow SI 02220.012E.6. to review any evidence/statements.

  2. Protest Involves the Fact and/or Amount of Overpayment

    The 60-day due process notice telling the debtor about credit bureau reporting does not offer the right to request reconsideration of the fact and/or amount of the overpayment. If the debtor still protests the fact and/or amount, follow the procedures in SI 02220.012E.6.b.

6. Debtor Alleges Nonreceipt of Overpayment

Follow procedure in SI 02220.012E.7.

7. Debtor Makes a Compromise Offer

If the debtor makes a compromise offer, process in accordance with existing instructions in SI 02220.030. If SSA agrees to the offer, stress that we must receive payment before the 60-day due process period expires or we will report the debt to the credit bureaus.

8. Debtor Alleges Nonreceipt of Initial Overpayment Notice

Follow the procedure in SI 02220.012E.9.

9. Report of Death

Follow procedures in SI 02220.012E.10.

10. Report of Bankruptcy Action

Follow procedures in SI 02220.012E.11.

D. Procedure - Handling Debtor Inquiries/Protests After Credit Bureau Reporting

Generally, inquiries and protests received after the debt has been reported to the credit bureaus will be handled according to normal processing. SSA's systems will automatically pass information about the inquiries/protests to the credit bureaus. Once a debt has been reported, it will remain on the debtor's credit record (with a few exceptions as explained below). The debt/debtor information, such as the most current debt balance and last payment, will be updated as necessary by SSA's systems.

1. Consumer Disputes Report with the Credit Bureau

Consumers have the right to dispute the accuracy of information about them reported to credit bureaus, including information reported by SSA. In some cases, consumers will dispute the accuracy by contacting the credit bureaus directly. This will most likely occur after the debtor has received a copy of his or her credit report and sees that information reported by SSA has been posted to the report. The consumer dispute will concern the amount or the fact of the debt.

When the credit bureau is notified by the consumer of the dispute, it will contact SSA and request that we verify our records of the debt. The contact will occur via an online system called the Automated Consumer Dispute Verification (ACDV) system, which links the credit bureaus with SSA. (Currently, the ACDV process is handled by the NEPSC.) Under the provisions of the Fair Credit Reporting Act, we have 30 days to respond to the dispute or the debt is deleted from the credit report. In most cases, SSA need only verify the fact or amount of the debt on the SSR and notify the credit bureau via the online program that the debt is correct as reported.

IMPORTANT: Do not process the consumer dispute as a request for reconsideration of the fact/amount of the debt. Requests for reconsideration of the fact/amount of the debt must be made directly to SSA and should be handled as described in SI 02220.012E.6.b.

2. Allegation Of Pending Protest or Waiver Request

If a debtor alleges that he or she filed a protest or requested waiver before or during the 60-day due process period but never received a decision, obtain an SSR query and proceed as follows:

a. FO Instructions

If there is a pending waiver or appeal request posted in the OPDD section of the SSR (see SM 01311.421 for codes and definitions) before or during the 60-day due process period but no decision has been made and released:

  • Inform the debtor that the debt will be removed from the credit report;

  • Look for an SSA-632-BK, a letter from the debtor or his or her representative or a Form SSA-795 in FO records or in the claims folder (See SM 01201.205 through SM 01201.235 for SSI folder retrieval instructions);

  • Call or email the Program Analyst that the debt should be deleted from the credit record. The DMS will contact the SSA person with authority to delete the item from the credit record. (Currently, the deletion authority rests in NEPSC only); and

  • Process the waiver/protest in accordance with SI 02260.001.

    If there is no pending waiver or appeal request posted in the OPDD section of the SSR but the debtor still indicates a prior protest/waiver was filed:

  • Look for an unprocessed SSA-632-BK, letter or SSA- 795 in FO records or in the claims folder, and if you find one:

  • Notify the debtor the debt will be removed from the credit record.

  • Call or email the Program Analyst that the debt should be deleted from the credit record,

  • Process the waiver/protest in accordance with SI 02260.001.

  • Post the pending request to the SSR via the MSSICS Waiver (UOWV) screen. (see MSOM BUSSR 004.009 and SM 01311.423.)

    NOTE: If you find no evidence of a protest or waiver filed before or during the 60-day due process period, then notify the debtor that the reporting was correct. Ask if the debtor wishes to file a new waiver request. If so, see SI 02220.014D.3. below.

    If SSR reflects a collection decision (meaning waiver/protest denied) before or during the 60-day due process period:

  • Advise the debtor that since the issue has been resolved, credit bureau reporting was appropriate.

  • Do not have the debt deleted from the credit record.

b. PC Instructions