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Social Security Fraud: What It Is & How to Report It

Social Security Fraud: What It Is & How to Report It

Social Security fraud is more common than many people realize. This is due to the fact that Social Security fraud exists in many different forms. Some forms can be incidental and easily fixed, while others are malicious and can do harm to individuals or the entire Social Security system.

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So, what is Social Security fraud? What are the consequences of lying to Social Security? And finally, how can you report Social Security fraud to the proper authorities? We will answer all of these questions and more, but first, let’s look at the statistics:

Social Security abuse statistics

Generally, Social Security fraud or abuse is defined as any kind of “improper payment.” Between 2004 and 2017, the Social Security Administration (SSA) found a total of $1.3 trillion in improper payments. With more than 60 million Americans receiving Social Security benefits, some form of fraud or misuse is inevitable. Nonetheless, the numbers are staggering. 

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While improper payments are the most common (and costly) form of Social Security fraud, they are not the only kind. The SSA subdivides improper payments into multiple categories and defines fraud in various ways. So, let’s take a closer look at what constitutes as Social Security fraud.

What is Social Security fraud?

First, let’s see how the SSA defines improper payments. As previously stated, Social Security fraud is not always part of a malicious act. It could be as simple as a clerical error that needs to be resolved. In any case, the SSA recognizes six common forms of improper Social Security payments:

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  • Insufficient documentation
  • Inability to authenticate eligibility
  • Administrative or process errors
  • Medical-necessity errors
  • Failure-to-verify-data errors
  • Issues with program design

All of the issues listed above are not considered “fraud,” but rather issues that result in improper payments. As a result, improper payments do not always constitute Social Security fraud. However, when they do, they are put into a 7th category: Other Reasons.

Ask an Expert!

If you’ve got questions about Social Security, our friends at JustAnswer have attorneys available to answer those questions. Chat with a Social Security lawyer now!

Defining Social Security fraud

Just as improper payments do not always constitute Social Security fraud, Social Security fraud does not always result in improper payments. In fact, there are many forms of Social Security fraud that generally stem from an intent to lie or misrepresent information to the Social Security Administration. The SSA recognizes the following forms of fraud:

  • Concealing information or making false statements
  • Misuse of benefits by a representative payee (i.e. a friend or relative charged with managing Social Security benefits for someone who cannot do it on their own)
  • Buying or selling Social Security numbers or cards
  • Criminal behavior or violation of the standards of conduct by an SSA employee
  • Impersonation of an SSA employee
  • Bribery of an SSA employee
  • Misuse of SSA grant funds or contracts
  • Using Social Security numbers to commit terrorist attacks

Some of these activities are more common than others. However, the first (“concealing information or making false statements”) is far and away the most common form of Social Security fraud. Many people try to qualify for Social Security or increase their benefits by withholding information or reporting false information related to their age, health, work history, and income. If the SSA does not catch the error, this fraud could result in improper payments.

What are the consequences of lying to Social Security?

If you are caught lying or misrepresenting information to increase your benefits or acquire improper payments for someone else, you may be prosecuted for fraud. Generally, the SSA will first check to make sure that it wasn’t a clerical error or an accident. However, if the SSA finds that you knowingly lied or misrepresented information, you will likely be brought up on charges for fraud.

Even if prosecutors choose not to pursue fraud charges, you can still end up paying severe penalties for lying to Social Security. Whether or not fraud charges are brought forward, the SSA has the legal power to take action with the Civil Monetary Penalty (CMP) program. This program allows the SSA to impose a penalty of up to $5,000 for each time that an individual lied, in addition to making the individual pay up to twice the amount they received in improper payments. Needless to say, you don’t want to lie to Social Security!

How to report Social Security abuse

Misuse of Social Security benefits and other Social Security violations are serious issues. Not only do they undermine the entire Social Security system, but they take money away from hardworking taxpayers and Social Security beneficiaries. So, if you know about one or more people committing Social Security fraud, how can you report it?

Fortunately, the SSA makes it pretty easy to report cases of fraud. You can either make a report online or over the phone. To report Social Security fraud online, simply go to the Office of the Inspector General website. Then, hover over the “About Fraud Reporting” tab and select Submit a Report. From there, you will need to provide details about the incident so that the SSA can open an investigation.

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If you prefer to file a report by phone, you may do so by calling the Inspector General’s fraud hotline at 1-800-269-0271. If you’re still having trouble submitting a report, you can visit your local Social Security office to request more information. 

How to avoid Social Security scams

Many people who receive Social Security benefits are over the age of 65. This demographic is most at risk of being affected by Social Security scams. These scams can siphon funds from your Social Security, steal your identity, or use your information to commit other forms of Social Security fraud. So, here are a few tips to help you avoid Social Security scams:

  • Avoid carrying your Social Security card or number around with you
  • Do not provide personal information via email, text, or social media
  • Do not say your Social Security number out loud in public
  • Store your Social Security number and financial information in a safe place

For more information on how to avoid or report Social Security phishing, consult the SSA anti-fraud facts page

Bottom Line

Social Security fraud can do untold damage to the Social Security system, taxpayers, and individual beneficiaries. Fortunately, there are ways to report fraud when you see it. More importantly, there are ways to avoid becoming the victim of a Social Security scam. 

If you’d like to learn more about avoiding Social Security fraud or identity theft, consult our guide on the 5 tips to identify and avoid scams!

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Matthew Jones is a freelance writer with a B.A. in Film and Philosophy. You can check out his blog at Philosophy in Film.

Richard Walters

Tuesday 9th of November 2021

Nursing home is stealing my monthly Personal expense money. 15 months of payments are owed, and there is no record of those payments being credited to my account. 15 months at $130 per month = $1,950. I have nursing home bank statements, Medicaid and Social Security documentation of funds not being paid. If you don't take cases like this do you know of anyone who does? Thanks, RW.

Isaac

Monday 13th of December 2021

Information on this should be in the article above. Chat with Lira, she might be able to help! https://lowincomerelief.com/chat/