Epic Government Fail of 2014: SSA Takes Money From People Who Owe Nothing

Epic Government Fail of 2014: SSA Takes Money From People Who Owe Nothing

Overall, 2014 was not one of the better years for the government. The Obama administration, local police departments, and the CDC have all had some pretty fantastic fails, and all got a heck of a lot of news coverage and publicity—sometimes even inducing panic.

The most unknown government fail, however, didn’t involve a deadly eastern Africa disease or police brutality. Instead, it involves the Social Security Administration sneakily taking over 1.9 billion dollars in tax refund checks from citizens, who most times were entirely oblivious to the fact that they owed any sort of money to the SSA.

The SSA apparently realized at the beginning of 2014 that there were a lot of Americans in debt, and that they needed to collect the difference. This would work out great for the SSA except for one detail: those people who were ‘in debt’ are now dead. This gets a vote for government fail. Oh, and most times, the SSA couldn’t actually show or prove how those people did anything to become in debt. They just had paperwork which somehow showed that the person received too much compensation or benefits one year, and most likely, that mix-up occurred decades ago.

One tax-paying American citizen, Mary Grice, was in the very unfortunate position of being in a family to which this very kind of mix-up occurred. In 1960, her father died, leaving her and four siblings with a single mother to get by. The family received survivor benefits from the SSA, and now the government agency is claiming that one child possibly received a bit too much compensation. By the way, the SSA doesn’t know which family member it was or how much extra money they got.

Rather than be discouraged by this minute complication, the SSA pressed boldly forward in the debt collection process by seizing Grice’s tax refund check, and then informed her almost a week later that she was in debt.

“It was a shock,” the 58 year old woman said. “What incenses me is the way they went about this. They gave me no notice, they can’t prove that I received any overpayment, and they use intimidation tactics, threatening to report this to the credit bureaus.” (Washington Post).

The Social Security Administration acted in complete disregard of federal laws already in place about debt collection. On the Federal Trade Commission’s website, it clearly states that:

. . . family members typically are not obligated to pay the debts of a deceased relative from their own assets. What’s more, family members – and all consumers – are protected by the federal Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to try to collect a debt.

Grice, along with thousands of other Americans treated likewise by the SSA, never received any notice of the debt until their money had already been taken. Richard Vogel, a constitutional law attorney working with Grice to fight against the debt placed on her by the SSA, said of the policy:

The craziest part of this whole thing is the way the government seizes a child’s money to satisfy a debt that child never even knew about . . . .They’ll say that somebody got paid for that child’s benefit, but the child had no control over the money and there’s no way to know if the parent ever used the money for the benefit of that kid. (Washington Post)

Since the beginning of the outrageous policy, there has been enough outcry and fighting of the policy by put-upon citizens to make SSA halt all these debt collection operations—for now at least.

Carolyn W. Colvin, the acting commissioner of Social Security, announced in April 14, 2014:

“I have directed an immediate halt to further referrals under the Treasury Offset Program to recover debts owed to the agency that are 10 years old and older pending a thorough review of our responsibility and discretion under the current law to refer debt to the Treasury Department.”

There is no current word on whether the SSA will decide to continue with this operation, or if it’s done and gone away forever. Knowing the government though, it’s probably a safe bet that we’ll continue to see similar attempts by different agencies to ‘get their money back’ in any kind of way possible, even if it’s borderline legal (or illegal). If this does reoccur, it will take a large fight to stop it again. In 2014, only 12 appeals out of 1,200 filed by angry citizens were won. That’s a ten percent success rate by citizens against the SSA. If this kind of debt collection does occur again, it’s going to be a rough ride for anyone involved.

Here’s hoping that 2015 is a much better year for law abiding taxpayers. Send us a tweet or leave a comment below with your vote for government fail of 2014.

Written by K. Montgomery

(Photo courtesy of frankieleon, Flickr CC BY 2.0)

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