TN 179 (12-20)

GN 02402.017 Handling Overpayments Attributed to Unauthorized Redirection of Payments

A. Instructions for handling overpayments attributed to unauthorized redirection of payments

After receiving an overpayment alert due to unauthorized redirection of payments, the technician must take the following actions

  • Determine if the overpayment was due to issuance of a Critical Payment System (CPS)/Immediate Payment (IP) or an Automated One Time Payment (A-OTP) because of unauthorized redirection of payment or payments. Also reference GN 02402.012 and GN 02402.020 for further information on nonreceipt alleged fraud and unauthorized redirection of payments;

  • Complete instructions making an overpayment fraud referral per GN 02201.050 for Title II and SI 02201.007 for Title XVI. Remember, the beneficiary is not at fault when unauthorized redirection of payment occurs. If a fraud report is input for OIG via the Allegation Referral Intake System (ARIS), it is to inform OIG of the unauthorized redirection of payments. When a fraud report is complete, field office technicians enter the beneficiary information into the Claim and Victim sections of the referral in ARIS; and

  • Follow Title II and Title XVI specific policies as detailed in this section.

B. Handling Title XVI overpayments due to unauthorized redirection of payments:

For Treasury issuing credits for reports of non-receipt, see SM 00609.610. If Treasury does not issue a credit for the report of non-receipt, you must select from the following actions:

If an IP replaced an unauthorized redirected payment, the next available payment will automatically recover the IP. In these cases, issue an A-OTP to replace that payment.

If an A-OTP resulted in an overpayment, then review these instructions:

  1. 1. 

    Do not send the overpayment notice;

  2. 2. 

    Stop overpayment collection and write off the overpayment as an erroneous overpayment decision (NT TAC), see SM 01311.280. Document the determination, per SI 02220.005.

NOTE: Previous instructions involve the use of the MO TAC (SM 01311.220) which created a BZ diary. Correct any MO TAC input with NT TAC if it meets the criteria in this section.

If Treasury subsequently issues a credit for a nonreceipt, review these instructions:

  1. 1. 

    If SSA wrote off the overpayment with an erroneous overpayment decision (NT TAC), any credit received from Treasury will not automatically reduce the overpayment and will appear in either the PMTH or OPRR segments of the SSR. The SSR should reflect remarks stating, "Alleged direct deposit or direct deposit fraud for MMDDYYYY Payment CPS or ATOP issued", per GN 02402.012B. NOTE: If a partial credit is received from Treasury, it will post to the OPRR segment with a DOC code of 534. If a full credit is received, it will reflect in the PMTH segment with a "/" next to the date of the payment.

  2. 2. 

    When the credit is received from Treasury, the remittance will create an excess decision to be resolved in the form of an OPX/B4 in the MPMT section and a B4 diary alert. The technician should reduce the NT TAC decision to resolve the excess and account for the remittance amount. For more information on how to resolve a B4 diary alert, see SM 01311.634.

NOTE: If the FO receives a case involving Title II, contact the Processing Center (PC) via Modernized Development Worksheet (MDW) or Request for Assistance (RQFA).

C. Handling Title II overpayments due to unauthorized redirection of payments - PSC Actions

Review the Master Beneficiary Record (MBR) special messages (SP MSG) and the remarks field (RMKS) on the Critical Payment System (CPS) output, to determine if alleged direct deposit fraud is involved. The remark on the CPS output should indicate "Alleged DD Fraud, Review Teletrace Result - Possible Delay in O/P Collection," per GN 02402.012B2c.

If the CPS involves alleged Direct Deposit fraud, take action to make the Total Amount Paid (TAP) equal to the Total Amount Recovered (TAR) on the CPS record.

If the MBR and CPS output identify the case as possible Direct Deposit fraud, take the following actions:

  1. 1. 

    If you determine the CPS input is missing the required remark identifying the involvement of fraud, add a Special Message "Alleged D/D Fraud, Review Teletrace Result-Possible Delay in O/P Collection."

  2. 2. 

    Establish an overpayment for the non-entitled debtor on the beneficiary's SSN via the Establish Debt (SMED) screen in the Debt Management System (DMS) to post the overpayment to the affected BIC with a subscript of "X" . Use the ROAR's Debt Management System (DMS) to post the overpayment to the affected BIC with a subscript of "X" (e.g., "AX" or "CX").

  3. 3. 

    Use a Type of Event (TOE) code of 65, with the fraud indicator of No (N) (see SM 00610.515F).

  4. 4. 

    Post the overpayment using the following: FIRST NAME: DIRECT MIDDLE NAME: DEPOSIT LAST NAME: FRAUD

  5. 5. 

    Annotate DMS remarks with the details of the overpayment.

  6. 6. 

    Post a Special Message to the MBR: "ALLEGED DD PAYMENT FRAUD-DO NOT INITIATE OVERPAYMENT RECOVERY OR CONTACT BENEFICIARY." Do not send an overpayment notice.

  7. 7. 

    On the next business day, review the ROAR record to determine if the case processed correctly.

  8. 8. 

    If the case processed correctly, establish a 90-day diary via the ROAR Diary Processing screen (DRDY) in DMS .

  9. 9. 

    If the 90-day diary matures and no additional guidance or credits is received, annotate the case with the listing code 119 and terminate collection activity for the overpayment (See subsection GN 02402.017E).

NOTE: Ensure the name input for the Non-Entitled Debtor (NED) remains as FIRST NAME: DIRECT MIDDLE NAME: DEPOSIT LAST NAME: FRAUD. Do not change the name of the debtor to reflect the alleged bank account owner shown in the Teletrace response. Do not charge the alleged bank account owner an overpayment unless instructed to do so by Office of Program Integrity (OPI) or OIG.

D. Handling overpayments identified in the "O/U PAY" field

If there is an overpayment in the O/U PAY field of the beneficiary, rather than on the ROAR under the NED record, then processing may have occurred incorrectly. To handle these cases, take the following actions:

Field Office (FO) Staff

  1. 1. 

    Contact the Processing Center (PC) via an MDW to request the following:

    1. a. 

      Follow steps in GN 02402.017C.2.a to properly establish the overpayment in ROAR with the subscript of "X."

    2. b. 

      Delete any O/U PAY amount pertaining to the alleged direct deposit fraud.

Processing Center (PC) Staff

After requested action is completed:

  1. 1. 

    Review the ROAR field to determine if the case processed correctly.

  2. 2. 

    Once verified, contact the FO via telephone and send an MDW to notify the field office of the following:

    1. a. 

      The PC established a ROAR overpayment and updated the DMS remarks.

    2. b. 

      The name, SSN, and overpayment amount of the alleged victim of the unauthorized Direct Deposit changes.

E. Processing Centers handling overpayments attributed to treasury credits or remittances where SSA issued a CPS to replace the redirected payments

If SSA receives a Treasury credit or remittance and SSA issued a CPS to replace the redirected payment, select from the below applicable scenarios and follow it's instructions:

A non-cleared CPS and no overpayment posted on the record:

  1. 1. 

    Clear the CPS via Manual Adjustment Credit Award Data Entry (MACADE) system using a CP entry of 0.00.

  2. 2. 

    If PHUS does not reflect a 170 event for the CPS payment, manually post the 170 event to PHUS via the SSA-1257.

  3. 3. 

    Manually post the non-entitled debtor overpayment for the redirected payment amount.

  4. 4. 

    On the next business day, make sure the overpayment posted correctly to the ROAR and review the PHUS to verify the 170 event posted.

  5. 5. 

    Review the credit, remittance, or Inter-governmental Payment and Collection (IPAC) documentation to determine the amount of the returned credit.

  6. 6. 

    Apply the credit or remittance to the overpayment with subscript of "X" via DMS RRRE screen per MS 01103.020.

    1. a. 

      If the credit received was for the full amount of the overpayment, then annotate the *119 listing code and send the action control record (ACR) to FIN.

    2. b. 

      If SSA only received a partial credit, allow the 90-day diary to control the case, and then send the ACR to files (FIN/FIN).

    3. c. 

      If the 90-day diary matures and there is no additional guidance nor did SSA receive an additional remittance or credit, then annotate the case with the listing code 119 for alleged Direct Deposit Fraud Cases, per GN 01040.005B.5 and MS 04905.010. Terminate the collection activity for the overpayment, and send the ACR to FIN.

A cleared CPS and no overpayment posted on the record:

  1. 1. 

    Follow steps in C.2.a. in this section and manually post the overpayment for the CPS related to the redirected payment.

  2. 2. 

    If PHUS does not reflect a 170 event via the SSA-1257.

  3. 3. 

    On the next business day, review ROAR to make sure the overpayment posted correctly and PHUS for the 170 event, and continue to follow C.2.a. through C.8 in this POMS.

  4. 4. 

    Review the credit, remittance, or IPAC documentation to determine the amount of the returned credit.

  5. 5. 

    Apply the credit or remittance to the overpayment with subscript of "X" (via DMS ROAR Remittance Exception (RRRE) screen) per MS 01103.020.

  6. 6. 

    On the next business day, review the record to make sure that the remittance posted correctly.

  7. 7. 

    If credit received for the full amount of the overpayment, then annotate the *119 listing code and send the ACR to FIN.

  8. 8. 

    If SSA receives a credit or remittance and issued a CPS, and there is an existing overpayment on the record due to an unauthorized Direct Deposit change, take the following actions:

    1. a. 

      Clear CPS via MACADE with CP of 0.00.

    2. b. 

      Review the credit, remittance, or IPAC documentation to determine the amount of the returned credit.

    3. c. 

      Manually apply the credit to the ROAR overpayment with a subscript of "X" using DMS RRRE screen.

    4. d. 

      On the next business day, review the ROAR field to determine if the case processed correctly.

    5. e. 

      Determine the case's processing status and follow these applicable steps:

      IF

      THEN

      If an overpayment still exists (the balance remains and it is not from some other type of overpayment),

      Diary the case for 90 days via the DRDY screen; do not diary any other overpayments on the record

      If the 90-day diary matures and there is no additional guidance or any additional remittance or credit

      Annotate the case with the listing code 119 for Alleged Direct Deposit Fraud Cases (see GN 01040.005 and MS 04905.010. Terminate collection activity for the overpayment, and send the ACR to FIN.

      If SSA applied the amount of the unauthorized redirected payment to the wrong overpayment listed under the ROAR section

      Adjust the overpayment and follow subsection GN 02402.017D.2.c. to repost a new overpayment with a subscript of "X.

      If SSA receives an IPAC credit greater than the alleged missing benefit payment and the remarks field indicates that possible fraud is involved, but there is no O/P or CPS record on the MBR Take the following actions:
      1. 1. 

        Review the IPAC documentation.

      2. 2. 

        Review the applicable records and queries (i.e., MBR, PHUS) to determine the origin of the remittance and if the beneficiary had a fraudulently redirected payment or payments.

      3. 3. 

        After reviewing the record for the IPAC received, release any underpayment to the beneficiary.

NOTE: If the FO receives a case involving Title II and not Title XVI, they should contact the PC via Modernized Development Worksheet (MDW) or Request for Assistance (RQFA). If the case is concurrent, resolve all actions for the Title XVI case, than contact the PC for the Title II case actions to be taken. In addition, the name input for the NED should remain as FIRST NAME: DIRECT MIDDLE NAME: DEPOSIT LAST NAME: FRAUD. Do not change the name of the debtor to reflect the alleged bank account owner shown in the Teletrace response. Also, do not charge the alleged bank account owner an overpayment unless instructed to do so by OPI or OIG.

F. References

  • MS 01103.020 ROAR Remittance Exception (RRRE)

  • GN 02201.050 Overpayment, Fraud Referral

  • GN 01040.005 Establishment of Diaries and Listings

  • GN 02402.012 Field Office (FO) Instructions for Nonreceipt Alleged Fraud

  • GN 02402.020 SSA Title II and Title XVI Reimbursement Process Due to Unauthorized Redirection of Reoccurring Payments

  • SI 002201.007 Supplemental Security Income (SSI): Overpayment Fraud

  • SI 0220.005 Documenting the supplemental Security Income (SSI) Overpayment

  • SM 01311.220 Bankruptcy and Referral to Another Agency - MJ, MO, MS, and MT TAC

  • SM 01311.280 Uncollectible and Erroneous Overpayment Decisions – N TAC and NT TAC

  • SM 01311.634 How to Resolve a B4 Diary

  • SM 00609.610 Treasury RFC and CSD Disposition Codes

  • SM 00610.515 Description of Data Maintained on Recovery of Overpayments, Accounting, and Reporting System

  • MS 04905.010 Listing Code (LIST)


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0202402017
GN 02402.017 - Handling Overpayments Attributed to Unauthorized Redirection of Payments - 06/03/2019
Batch run: 05/11/2021
Rev:06/03/2019