Effective Dates: 10/08/2024 - Present Previous | Next

TN 22 (10-24)

GN 03970.017 Referrals of Possible Fee Violations and Non-Fee Violations

A. Introduction to referrals of suspected violations

The Field Office (FO), Processing Center (PC), Disability Determination Services (DDS), the Office of Hearings Operations (OHO), or Office of Appellate Operations (OAO) may discover evidence of possible fee and non-fee violations. For examples and definitions of violations and non-violations, see GN 03970.013.

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 staff will follow their internal procedures as well as the instructions in DI 31001.010D to collect supporting information and refer an alleged violation to the appropriate regional office. OHO and OAO staff will follow the instructions in Hearings, Appeals, and Litigation Law (HALLEX) manual I-1-1-50.

NOTE 1: 

If we directly pay a representative a fee in excess of the authorized fee, the error may result in a fee violation if the representative does not return the excess fee on receipt or following our request. If we directly pay an entity a fee in excess of the fee authorized to the affiliated representative, the error may result in a non-fee violation if the entity's point of contact (POC) does not make a good-faith effort to cooperate with us and assist in returning the excess fee. Process direct payment errors using the instructions in GN 03970.025 and GN 03920.051. For instructions on how to handle excess fees paid to an entity, see GN 03920.052. If the POC does not make a good-faith effort to cooperate with us or actively refuses to assist in remitting an excess or erroneous fee paid to the entity, develop and refer as a non-fee violation as described later in this section.  For additional information about the assignment of direct payment of fees, including the roles and responsibilities of POCs, refer to GN 03920.021.

Use the instructions in GN 03970.017B or GN 03970.017C to develop and refer a representative for possible fee violations, and GN 03970.017D and GN 03970.017E to develop and refer representatives, including POCs, for non-fee violations. For information on pursuing recovery of excess fee payments made to an individual representative, refer to GN 03920.051.

NOTE 2: 

Do not use the instructions in GN 03970.025 to process 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. Instead, proceed to the referral instructions in GN 03970.017B or GN 03970.017C. If the representative inadvertently (i.e., because of our error) obtained direct payment, they did not violate of our rules, and no referral is needed unless we pursue recovery of the fee, and the representative does not cooperate. See GN 03920.051 for information on when we will pursue recovery of an excess fee.

B. Procedure for FO development and referral of possible fee violations

1. Develop the possible fee violation as fully as possible

Possible fee violations are those related to charging and collecting a fee. A possible fee violation occurs when a representative collects a fee that we did not authorize or collects a fee in excess of the amount we authorized. For other examples of a possible fee violation, refer to GN 03970.013B.

When 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 box on the SSA-1696 (Claimant's Appointment of a Representative) and mistakenly presents themselves 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 issue before it becomes a violation. For example, we mistakenly pay a representative $1,000 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 (e.g., direct payment errors, unauthorized fees, fees in excess of the authorized amount), allow the representative 30 days 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 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. See GN 03920.051 for information on recovering excess or otherwise erroneous fees paid to a representative.

NOTE 1: 

If the suspected violation is criminal or involves fraud do not contact the representative (see instead GN 03970.016). For a possible non-fee violation (e.g., the representative failed to provide competent representation), refer to GN 03970.017D.1. (in this section), regarding whether to contact the representative.

However, you may contact a representative if the alleged violation relates to the requirement for electronic filing of an appeal 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 03970.017F (in this section).

NOTE 2: 

If an entity retains an excess or otherwise erroneous fee despite our requests to remit it, refer to the instructions in GN 03920.052. As a reminder, we do not sanction entities and the Rules of Conduct and Standards of Responsibility for Representatives do not apply to entities.  

IMPORTANT: Keep the referral development information in a separate electronic file. Never store referral development in the claim(s) file.

a. Review the claim(s) file

If there is a paper folder and it is not in the FO, request the claim(s) file. If the claim(s) file is a certified electronic file (CEF), search eView or Evidence Portal, or, if the office to which you are referring the case has no eView or Evidence Portal access, create a Portable Document Format (PDF) 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) to obtain proof of payment.

In cases where the claimant, beneficiary, or recipient has paid the representative directly, ask the individual(s) to provide you with proof of payment of the unauthorized fee (e.g., 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 (ROC))

Complete a report using an SSA-5002. Include a detailed description of the possible violation. Use the following instructions to complete the report.

  1. 1. 

    Identify who:

    Identify who (e.g., claimant, representative payee if (applicable), representative, POC, or witnesses) is involved in or is a witness to the event that led to the possible violation.

    List the names, addresses, and telephone numbers of the representative, claimant, beneficiary, or recipient. Explain whether the representative involved was acting as the claimant’s representative, an entity’s POC, both, or neither.

    NOTE: Although POCs are responsible for acting on an entity’s behalf to resolve fee issues or errors, the actions of others affiliated with an entity may also result in a possible fee violation. For example, someone other than the representative or POC (e.g., an unappointed managing partner or another representative employed by the same entity) may request or collect an unauthorized fee for themselves or they may fail to properly oversee those under their supervision. Be sure to identify all such individuals whose conduct is involved in the possible violation. Do not refer others simply because they are affiliated with the same entity as the individual suspected of the possible fee violation.

    List the names, addresses, and telephone numbers of any witness, indicating the witness’s relationship to the claimant, beneficiary or recipient, or the representative or POC.

  2. 2. 

    Explain what:

    Explain the events (actions on the part of the representative and the claimant) that led to the possible violation. For the different violation types, refer to the examples in GN 03970.013. The following bulleted list provides 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;

    • •

      Circumstances that led the claimant to question the fees that the representative charged (e.g., the fee notice or another person’s input);

    • •

      Identify whether the fee was in addition to any fee(s) that we 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;

    • •

      If we authorized the fee, indicate whether we paid it directly and, if so, whether we certified payment to the individual representative;

    • •

      Determine and document whether the representative collected any money to recover costs or expenses; and

    • •

      Determine and document whether the claimant had entered into an agreement to deposit any of the fee into a trust or escrow account. For more information on escrow accounts, refer to GN 03920.025.

  3. 3. 

    Identify when:

    Identify when the events took place, as described in the following list:

    • •

      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 we paid the unauthorized fee to the representative; and

    • •

      Indicate when the claimant realized that the representative charged an unauthorized fee.

  4. 4. 

    Identify where:

    Identify where the events took place (e.g., the claimant’s home; the representative’s office; a bank or check cashing facility; through the mail).

  5. 5. 

    Explain how:

    Explain how the events took place, as described in the following list:

    • •

      How much did the representative charge;

    • •

      How did the representative request the unauthorized fee (e.g., orally or a billing statement) and who (e.g. the representative, the POC, or another individual affiliated with an entity or employed by the representative) requested it;

    • •

      How much did the claimant pay;

    • •

      If paid, how did the claimant pay (e.g., cash, check, money order, credit card, or provided a personal service for the representative);

    • •

      Whom did the claimant pay; and

    • •

      How did the representative acknowledge payment (e.g., 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, beneficiary’s, or recipient’s phone.)

  6. 6. 

    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 and notices

Obtain copies of any documents and notices and any other evidence not already mentioned that support the information that you provided in preparing the SSA-5002. For example, claimants, beneficiaries, or recipients often have letters or electronic communications (e.g., email, text, or voicemail messages) about the fee, so provide a copy of the written communication or make a note of the oral communication on an SSA-5002. In addition, include pertinent notices from the Online Retrieval System (ORS) and documents from the Evidence Portal (EP) or eView.

e. Obtain signed statements, if available

Obtain signed statements from any individual with direct knowledge of the facts involved, including the claimant, beneficiary or recipient, 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 referral file a copy of the Form SSA-1696 (or other notice of appointment for appointments that began prior to December 9, 2024); written and signed documentation of a fee arrangement between the parties; and documentation that we recognized the individual as the claimant’s representative such as a copy of the RSR103 - Appointment Confirmation to Representative [Without Assignment] (see GN 03905.035B).

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 will 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

Forward the development information, claim(s) file, or PDF copy, and, if applicable, proof that we have already offered the representative the opportunity to correct the suspected fee violation to the servicing regional Center for Programs Support (CPS) with jurisdiction over the referring office. Refer to GN 01070.105 for instructions on locating regional CPS contact information. When CPS finishes reviewing the case, CPS refers the case to OGC. See the policy for suspected criminal violation referrals in GN 03970.016. Refer any additional development or inquiries to CPS.

NOTES:

  • •

    If the claim(s) is a paper folder, complete any adjudicative or post adjudicative FO actions that you might need prior to forwarding the claim(s) 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 any sanctions proceeding.

  • •

    The Office of Central Operations (OCO) must follow the procedures listed for the Processing Centers.

  • •

    Headquarters components other than OCO must refer the case to the CPS in the servicing regional office.

C. Procedure for PC development and referral of possible fee violations

1. Develop the possible fee violation as fully as possible

Use the following instructions to develop and refer possible fee violations:

  1. a. 

    If the paper claim(s) file is not in the PC, request it. If the file is a CEF, create a PDF copy of the file only if the office receiving the referral does not have access to eView or Evidence Portal. For more information on copying a CEF to PDF, see DI 81001.035.

  2. b. 

    If the payment of the fee is material to the development and we paid the representative directly, include a note in the file but do not request proof of the payment from the representative or their financial institution (such as, checks or direct deposit confirmation). Ask the claimant, beneficiary, or recipient to provide you with proof of payment of the unauthorized fee, if the claimant, beneficiary, or recipient paid the fee directly. For more information about obtaining proof of payment, refer to GN 03970.017B.1.

  3. c. 

    To complete a report about the possible violation, follow the instructions in GN 03970.017B.1.c.

2. Request management review if local office instructions require it

Once you complete development, request that management review the case to ensure that development of the possible violation is complete. If management review is not required by your local office proceed to the next step.

3. Management review is complete

Once the management review is complete (if needed), forward the development information, claim(s) file, PDF copy, and, if applicable, proof that we already offered the representative the opportunity to correct the potential fee violation to the Operations Support Branch (OSB) for your PC. Refer any further development to OSB.

The PC is responsible for assigning an individual to review violation referrals to ensure that development is complete.

D. Procedure for FO development and referral of possible non-fee violations of the Rules of Conduct and Standards of Responsibility for Representatives

Non-fee violations are not directly related to charging and collecting a fee. Some non-fee violations may also qualify as criminal violations. For a definition and examples refer to GN 03970.013.

1. Develop and refer possible non-fee violations

Use the following instructions to develop and refer a possible non-fee violation:

  1. a. 

    If the possible violation involves a particular claim(s) and a paper claim(s) file exists, request the claim(s) file if it is not in the FO. If the file is a CEF and the receiving office does not have access to eView or Evidence Portal, create a PDF copy of the file. For instructions on how to copy a CEF to PDF, refer to DI 81001.035.

  2. b. 

    Use the instructions in GN 03970.017B.1.c., as a guide to complete a report on an SSA-5002 or SSA-1666 about the possible violation.

  3. c. 

    If applicable, obtain copies of other pertinent evidence, such as a State Bar notice of disbarment or suspension of a representative or POC, or any document proving the disbarment (e.g., a local newspaper article announcing the disbarment).

  4. d. 

    Obtain copies of any documents and any other evidence not already mentioned that support the information you provided in your report.

  5. e. 

    As appropriate obtain signed statements from the claimant, beneficiary or recipient, and any possible witnesses detailing the events leading to the possible non-fee violation. If any individual refuses to cooperate or sign a statement, document this information on an SSA-5002 or SSA-166.

  6. f. 

    Contact a representative about a failure to use our electronic services when required following the instructions in GN 03970.017F.1. You may also contact suspected violators of our duty to submit evidence, as described in GN 03970.010B. 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 SSA-5002 or SSA-166.

    Do not contact the representative, including a POC for a statement regarding any other possible non-fee violation.

  7. g. 

    Important: 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 possible violation is fully developed.

3. Management review is complete

Once the management review is complete, forward all development information and the claim(s) file or PDF copy to the regional Center for Programs Support (CPS) with jurisdiction.

Refer any further development to the regional CPS. After CPS refers the matter to OGC per GN 03970.016, CPS will continue to review and forward any additional development materials to OGC.

NOTE: 

If you need the paper claim(s) 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 possible non-fee violations of the Rules of Conduct and Standards of Responsibility for Representatives

1. Develop and refer possible non-fee violations

Use the following instructions to develop and refer all possible non-fee violations:

  1. a. 

    If a paper folder is involved and it is not in the PC, request the folder. If the claim(s) file is a CEF and the receiving office does not have access to eView or Evidence Portal, create a PDF copy of the file. For instructions on how to copy a CEF to PDF, see DI 81001.035.

  2. b. 

    As a guide on how to complete a report about the violation, see paragraph GN 03970.017B.1.c.

  3. c. 

    If the referral needs additional development, request that the FO complete the development and forward it to the PC per GN 03970.017D.1.c.

2. Request management review if local office instructions require

Once development is complete, request the assigned reviewer to review the file, to ensure that the referral is complete and fully developed. If management review is not required by your local office proceed to the next step.

3. Management review is complete

Once management completes the review (if required), forward the development information and claim(s) file or PDF copy to the CPS (OCO) or OSB (PC) of jurisdiction.

Refer any further development to CPS and OSB. After the initial referral, CPS or OSB will continue to review and forward additional development materials to OGC.

F. Referring possible violations of the requirement to use our electronic services

1. iAppeals requirement

While we usually process possible violations of the electronic services requirement the same way we process other possible non-fee violations, there are special considerations for these alleged violations. We want to provide representatives 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 potential sanctions after reminding the representatives of the requirement. To determine whether to refer a representative, consult the examples in GN 03970.013C. Document your contacts on an SSA-5002. Please do not refer the case to OGC if it appears that the representative’s failure to use the required electronic service was an isolated incident, unintentional, caused by computer error, or otherwise excusable.

2. iAppeals requirement referral procedure

To develop the referral, follow the procedures described in GN 03970.017B.1.c., and also take the following actions:

  1. a. 

    Compile all the written reminder notices and other records documenting communication with the representative, such as the standard warning letters in GN 03970.017F.3, as well as any reports of contact documenting conversations with the representative, in person or by telephone.

  2. b. 

    Print from the CEF or make copies (non-electronic folder), or attach to an email the Form SSA-1696 containing the representative’s appointment and the representative’s request for direct payment .

  3. c. 

    Compile all supporting evidence (e.g., notations on the developmental screens) and any written responses received from the representative following the FO’s written reminders.

  4. d. 

    Prepare an SSA-5002 or SSA-166, and include a detailed description of why you think the representative has violated the electronic filing rule, along with the first and last names and Social Security Numbers (SSNs) of the cases used to substantiate the referral. Include the representative’s SSN or RepID, if known.

  5. e. 

    Do not annotate any claim systems. Keep the referral development documentation in a separate paper or electronic file in the FO. Either refer the representative to OGC for an investigation within two years or destroy the file.

  6. f. 

    If OGC needs proof that the representative actually received direct payment in the case, develop as described in GN 03970.017B.1.b, and forward this information to OGC to associate with the prior referral.

  7. g. 

    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 it appears the representative may have encouraged the claimant to personally file a paper appeal, but later submits a request for direct payment, you should contact the representative to remind them of the electronic filing requirement. If this pattern continues, and it appears that the representative is deliberately circumventing 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 the following subsection, GN 03970.017F.3. Include in the warning letter the names of the specific cases involved so that we will have documentation of the cases if needed for a future sanctions referral.

3. iAppeals requirement sample warning letter

The following is a sample “warning letter”notifying a representative of possible action for non-compliance with the electronic filing requirement. The Document Processing System (DPS) contains a sample of this letter, under the same name, “iAppeals Requirement Warning Letter” in the “general” category under “local” source.

Dear [insert representative’s name]:

We are writing to remind you when 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 payment of fees on certain Social Security cases. These cases include appeals of medically denied Title II or Title XVI claims pending at the hearing and Appeals Council levels.

It has come to our attention that you may not be complying with this mandate. Noncompliance may result in your suspension or disqualification.

We ask that you 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 became effective March 16, 2012. You can find our Internet Disability Appeals application on our website at http://www.ssa.gov. Under the “Benefits” tab of the main menu, select “Apply,” then select  “Appeal a decision we made.”

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. IMPORTANT: list only cases with an active appointment and appeal pending.]

If we continue to receive improperly submitted appeal requests in cases where this mandate applies, we will refer the matter to our Office of the 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.]

Sincerely,   

Field Office Manager [optional]

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0203970017
GN 03970.017 - Referrals of Possible Fee Violations and Non-Fee Violations - 10/08/2024
Batch run: 10/08/2024
Rev:10/08/2024