I have a very unique situation, but I'm hoping that someone can tell me how the regular credit reporting rules would apply. My question really is - how would the 7 years of reporting to CRAs apply in this situation described below and when will this "collection" fall off of his credit report?
Here's an outline of the facts:
- Husband received a large social security payment (apprx $20,000) in 2011 because, as SSA claimed, he was due this as a death benefit from his deceased spouse that passed in 2004. Husband thought the payment was odd, so he went to great lengths to contact SSA and confirm that he was entiled to this money. They confirmed that he was.
- Husband used the money to pay off debt
- Sometime around 2014, SSA contacted husband and claimed that the $20k was an accidental overpayment and they demanded to be repaid the full $20k. Husband had no ability to pay this. There's an appeal process that he followed and it has been a NIGHTMARE because SSA sends us letters stating it's resolved (we have them) and then a year later, starts sending letters and demanding payment again. It's seriously insane. He's been exchanging letters and calls with SSA for the past 4 years trying to resolve the situation.
- In mid-2018, a collection account from SSA popped up on his credit report. The listed "date opened" is April 1, 2017.
- Husband plans to continue fighting with SSA because, per their appeals rules, he should be entitled to have their demands for repayment stopped and the "debt" essentially forgiven. But we have zero confidence that SSA is ever going to resolve this appropriately.
Very technically speaking, the "debt" is from 2011, because that's when he was paid the amount that they later determined was incorrect. However, they claim to not have discovered the overpayment error until around 2014 and then the CR states the account was "opened" in 2017 and then it showed up on the CR for the first time in 2018. All so confusing! This unfortunately has seriously damaged husband's credit and it's all very unfair.
Working with Social Security is very difficult.
I have heard many horror stories about overpayments even my mother in law had that happen.
I think you should consider filing a complaint against Social Security with the Consumer Financial Protection Bureau. I's free and they may help. Filing complaints there have helped many on the forum for other things that truly are errors and not just trying to "clean up" your report.
Also read this link on overpayments:
It stinks but if you receive any money from Social Security you could be held liable to repay it even if you call Social Security and someone tells you "yes the amount you received is correct"
My dealings with Social Security are bizarre.
I was the representative payee for my kids who's mom received disability.
I had no contact with their mom and the disability payment they received was consider sufficient for child support.
One day I received a letter in the mail about nearly $20,000 in overpayment to the kids they wanted back. They wouldn't talk to me about the case since I wasn't the one who was on disability they just tried to collect the money from me.
Thanks, and I think you're right that the CFPB might be the right approach here.
I've read a TON on the SSA website regarding overpayment and there is a clear process for having the overpayment collection set aside. It requires that the recipient have done nothing wrong and for their to be no financial ability to repay the overpayment (summarzing). Both of these are present in my husband's case and we have submitted the appeal about 5 times (not kidding), along with follow up letters, all via FedEx with tracking details. SSA just basically ignores our appeals and keeps demanding payment. There was a guy from SSA that actually calle dmy husband and when my husband explained the situation (i.e. that SSA had seriously dropped the ball), the guy became threratening and said that if my husband couldn't tell him the exact name of the person that he spoke to in 2014, then no appeal would be granted. I'm not even kidding, it feels like we're working with the mafia. At this point, I just cannot imagine that further communication with SSA will be productive. We have a giant file that we can use some day if it were to become a legal issue, but until then, we just want it off of his credit report.
That is just HORRIBLE! I know 7 yrs ago, SS came after my husband and I. When my husband was 10 yrs. old his father died & he received death benefits (which, of course, my husband knew nothing about). At 17 his stepfather threw him out of the house. He was still in school & in order to support himself he got a part time job at a gas station I believe (when attendants actually pumped gas). During this time his mother & stepfather kept his checks without him even knowing he received checks. Fast forward 35 YEARS, we had to pay back several thousand dollars as a result of the Gas Station salary resulting in "Overpaid Benefits"! We called, we wrote, we spent many hours at Social Security. Their response was that they were going back even 60 YEARS on people & that "someone has to pay for the shutdown". I truly hope you have better luck than we did!