A fee violation occurs when a representative, including an entity's point of contact
(POC), knowingly charges, collects, retains, or arranges to charge, collect, or retain,
from any source any fee for representational services in violation of an applicable
law or regulation (see GN 03970.010C.2). The representative's actions may be direct or indirect, and the unauthorized fee
collection may be total or partial. For the procedures to develop and refer individual
representatives and POCs for suspected fee violations, see GN 03970.017.
For instructions concerning excess or erroneous fee payments made to an entity, see
GN 03920.052
When an entity wants to receive direct payment of authorized fees through assignment,
the entity selects a POC to speak and act on the entity’s behalf in dealings with
us (see 20 CFR 404.1703 and 416.1503). A POC’s role is to assist us in the resolution of fees or fee errors. Although
a POC need not be appointed to any claim, matter, or other issue, they are considered
a “representative” for purposes of the Rules of Conduct and Standards of Responsibility
for Representatives. A sanctioned individual is not eligible to serve as a POC. The
POC may be subject to suspension, disqualification, and in rare circumstances, criminal
prosecution; however, they will not be held financially responsible for repayment
of excess or otherwise erroneous fees paid to the entity. POCs will generally not
be sanctioned if their entity does not remit excess or erroneous fees unless they
act in a manner that violates our Rules of Conduct and Standards of Responsibility
for Representatives. For example, a POC who does not make a good-faith effort to timely
cooperate with us or actively refuses to assist in remitting excess or erroneous fees
could be considered to have committed a non-fee violation. However, a POC may be referred
for a suspected fee violation if they collect and retain an excess, erroneous, or
unauthorized fee for providing representational services in an individual capacity.
For further information about assigning direct payment of fees, including the roles
and responsibilities of POCs, refer to GN 03920.021.
NOTE
2: 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 processes of these organizations. It is not a violation of our fee
rules for a representative, whom 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.
a. Total unauthorized fee collection
A total unauthorized fee collection occurs when a representative collects a fee directly
from the claimant, any affected auxiliary beneficiary or eligible spouse, or another
individual (whether related or unrelated to the claimant, any affected auxiliary beneficiary,
or eligible spouse) without our prior authorization.
Payments to a representative by third-party entities are an exception to our general
authorization requirement. For more information on fees that are not subject to our
authorization, see 20 CFR 404.1720(e) and 416.1520(e), and GN 03920.010.
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 a representative collects an amount in excess of the
fee we authorized. The amount over the authorized fee is a partial unauthorized fee
collection.
NOTE: If we pay a representative in error and the representative does not return the excess
fee on receipt or after notification of the error, the direct payment error may result
in an unauthorized fee collection. This unauthorized fee collection could be “partial”
or “total.”