Effective Dates: 03/09/2016 - Present Previous | Next

TN 40 (04-19)

GN 02201.032 Reporting Title II Overpayment Debts to Credit Bureaus

A. Policy - general

1. Authority

The Domestic Employment Reform Act of 1994 (DERA) authorized the Social Security Administration (SSA) to report certain delinquent Title II overpayment debts to credit bureaus. The Debt Collection Improvement Act of 1996 (DCIA) gave SSA permanent authority to continue credit bureau reporting.

In addition, the Fair Credit Reporting Act (FCRA) contains provisions on credit bureau reporting, including provisions on handling consumer disputes about information reported to credit bureaus by SSA and other credit reporting entities (see GN 02201.032D.2.)

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 II or 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.

NOTE: See SI 02220.014 for information regarding reporting Title XVI debts to the credit bureau.

3. Criteria for selecting Title II debts for credit bureau reporting

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

  1. a. 

    The debt must have been paid to a person after that person attained 18 years of age;

  2. b. 

    The debt must be considered to be “unrecoverable” under regulations issued by the Commissioner of Social Security (see GN 02201.031B for definition of the term “unrecoverable”);

  3. c. 

    The debt must be owed by a person who is no longer entitled to receive Social Security benefits;

  4. d. 

    The debtor must be alive;

  5. e. 

    The debtor's beneficiary own account number (BOAN) must be on the Master Beneficiary Record (MBR),

  6. f. 

    The debt must be $25.00 or more, and

  7. g. 

    The debt must be delinquent for no more than 6 years and 6 months (see GN 02201.030B.2. for the definition of the term “delinquent”).

Note: Based on these criteria, SSA does not report beneficiary identification code (BIC) “C" debtors to credit bureaus.

B. Process

1. Debtor selection

Each month, SSA's systems select Title II debtors who reach unrecoverable status for credit bureau reporting.

NOTE: If the debt has not been reported to the credit bureau, the presence of a KTAC (see SM 01311.255) would prevent it from being reported.

2. Debtor notification

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

  1. a. 

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

  2. b. 

    Date of birth;

  3. c. 

    Date the overpayment became delinquent (see GN 02201.030B.2. for definition of the term “delinquent”);

  4. d. 

    Date of last payment, if any; and

  5. e. 

    Past due balance of the overpayment.

NOTE: SSA sends one notice to inform the debtor about the proposed credit bureau reporting and administrative offset of Federal payments. The same repayment options and due process rights described in GN 02201.031C. are offered for credit bureau reporting and for administrative offset. All External Collection Operation (ECO) notices sent November 2015 or later will be stored in the Online Retrieval System (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. a. 

    The expiration of 60 days from the date of the notice, or

  2. b. 

    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 new information such as repayments, changes of address, and protests received after the debt is reported to the credit bureaus.

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

C. Handling debtor inquiries/protests during 60-day due process period - procedure

Shortly after selecting the debtors, SSA sends each individual a notice about the planned action(s). Among other things, the notice informs the debtor:

  • •

    Of the amount of the delinquent overpayment debt;

  • •

    That SSA plans to refer the debt to Treasury for Tax Refund Offset (TRO)/Treasury Offset Program (TOP) and/or send information about the debt to credit bureaus after 60 days have expired from the date on the notice;

  • •

    That SSA will not take this action if, before the end of that 60-day period, the debtor pays the debt in full, makes regular installment payments under an agreement with SSA, requests waiver, or furnishes evidence showing that he or she does not owe all or part of the stated amount or SSA does not have the right to collect the debt; and

  • •

    That the debtor may review and copy SSA's records about the debt.

    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 GN 02201.030D.1.

2. Request for Waiver

Follow procedure in GN 02201.030D.2.

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 GN 02201.030D.3.

4. Request for installment payments

Follow GN 02201.030D.4.

5. Debtor objects to collection of debt

a. 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, advise that if he/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 GN 02201.030D.5. to review any evidence/statements.

b. Protest involves the fact and/or amount of overpayment

If a debtor protests the fact and/or amount of a debt, obtain a FACT query.

If there is no indication that a request for review is pending, explain that the time period to appeal the overpayment determination has expired and, therefore, the determination is final. If good cause for extending the time limit is established, process the request as timely filed (see GN 03101.020).

If the debtor indicates that he/she has evidence that refutes SSA's records, explain that the debt will be referred to Treasury unless we receive the evidence within 60 days from the date of the pre-offset notice. Follow GN 02201.030D.5.a. and GN 02201.030D.5.b. when the evidence is received.

 

6. Debtor alleges non-receipt of overpayment

 

If a debtor alleges non-receipt of the overpayment, obtain an ACCT/ROAR query and a PHUS query. If the query shows no record of non-receipt of the payment(s) in question, proceed as follows

  • •

    If the debtor had a representative payee, explain that the payment(s) was sent to the payee and there is no indication that payment(s) was not received. If there was no representative payee, explain that our records do not show any evidence of a non-receipt allegation at the time the initial overpayment notice was sent.

  • •

    If the debtor insists that we provide a photocopy of the check(s) in question, explain that we will investigate but the debt will still be referred to Treasury for offset. Repayment of any erroneous offset will be made if the investigation supports the non-receipt allegation. FollowGN 02406.000 to handle the non-receipt allegation (these references apply to Titles II and XVI payments, as well as Black Lung payments). DO NOT Make a ROAR Input.

NOTE: If the investigation shows that a copy of the check is not available, presume that the debtor received the check. The overpayment should be determined to stand.

7. Debtor makes a compromise offer

If the debtor makes a compromise offer, process in accordance with existing instructions in GN 02215.100 through GN 02215.125. If SSA agrees to the offer, stress that payment must be received by us before the 60-day due process period expires or we will report the debt to the credit bureaus.

8. Debtor alleges non-receipt of initial overpayment notice

Follow the procedure in GN 02201.030D.8. When forwarding material to PC, annotate as “Necessary Action—TOP/Credit Bureau Reporting Case—Do Not Backlog.”

9. Report of death

Follow procedures in GN 02201.030D.9.

10. Report of bankruptcy action

If the debtor alleges that a bankruptcy petition is pending or the debt has been discharged in bankruptcy, obtain a copy of the petition or discharge order. The FO inputs “Decision Pending” via the DFBP screen (Record Bankruptcy Petition) and sends the petition to the Processing Service Center (PSC)/Office of Central Operations (OCO) for their action. (See GN 02215.185 for information on handling bankruptcy cases.) To process a notification of pending bankruptcy, See GN 02215.190 for FO procedures and GN 02215.195 for PC procedures.

If the debtor alleges that the debt has been discharged in a bankruptcy judgment, ask him/her to submit a copy of the discharge. If the SSA debt is listed on the discharge, input “Decision Pending” via the DFBP screen to prevent any further collection activity. If the SSA debt is not listed on the discharge, make no system input. The PSC/OCO handles the case in accordance with GN 02215.230.

 

D. Handling debtor inquiries/protests after credit bureau reporting - procedure

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 North Eastern Program Service Center (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 MBR/ROAR 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 GN 02201.030D.5.

2. Allegation of pending protest or waiver request

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

If there is a 23W or 23R posted before or during the 60-day due process period but no decision has been made and released:

  • •

    Notify the Debt Management Program Analyst that the debt should be deleted from the credit report.

  • •

    Tell 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.

  • •

    Process the waiver/protest in accordance with GN 02201.034 or GN 02201.036.

If ROAR reflects an unfavorable reconsideration or waiver decision 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 delete the debt from the credit record.

If there is no ROAR posting 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.

  • •

    Also look in DMS REMARKS or the Special Message field for indications that a waiver was requested but not posted to the system. If you find evidence of a prior protest, proceed as follows:

  • •

    Notify the Debt Management Program Analyst that the debt should be deleted from the credit report.

  • •

    Tell the debtor that the debt will be removed from the credit report.

  • •

    Post the pending request to ROAR via the DRPR screen.

  • •

    Process the waiver/protest in accordance with GN 02201.030D.

If the records review fails to produce any evidence of a protest or waiver filed before or during the 60-day due process period, notify the debtor that the reporting was correct. Ask if the debtor wishes to file a new waiver request. If so, follow GN 02201.030D.3.

3. Request for waiver

If a request for waiver is received after the 60-day due process period and the debt has been reported to the credit bureau, proceed as follows:

  1. a. 

    Obtain an SSA-632-BK in accordance with current instructions in GN 02250.002 and GN 02250.200.

  2. b. 

    Advise the debtor that the waiver will be processed as soon as possible but that the debt will remain reported to the credit bureau. If the debt is eventually waived, SSA will update the credit report to show a balance of zero.

4. Request for installment payments

  1. a. 

    Establish the agreement per GN 02210.180.

  2. b. 

    Advise the debtor the debt will remain reported to the credit bureau but that SSA will update the balance to reflect the most recent repayment.

5. Report of bankruptcy

  1. a. 

    If debtor alleges a bankruptcy petition was filed and the debt was discharged, request evidence of proof of the discharge. If proof is received, inform the debtor the debt will be removed from the credit report. (See GN 02215.190 - GN 02215.235.)

  2. b. 

    If the debt is discharged without exception, call or email the Debt Management Program Analyst that the debt should be deleted from the credit report.

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0202201032
GN 02201.032 - Reporting Title II Overpayment Debts to Credit Bureaus - 03/09/2016
Batch run: 10/26/2023
Rev:03/09/2016