Can You Sue Social Security for Swindling You Out of Lifetime Benefits?

After talking with one of out nation’s top attorneys, who recently filed a class action suit against Social Security, it appears to be both legal and practicable to pursue class action suits against the Social Security Administration if it has scammed a class of beneficiaries out of their full, rightful, and hard-earned lifetime benefits.

I’ve written about three such scams here. Today, I’ll tell you about a fourth Social Security scam. Actually, I’ll have Social Security whistle blower, John McAdams, a Social Security benefit claims authorizers tell you about this scam. Here’s his email from a couple days back.

Hi Larry,

While still waiting for the 13,564 beneficiaries to receive the approximately $141.7 million owed to them (based on Social Security’s own Office of the Inspector General Report), I’ve come across another class of widows that we’ve cheated. Here’s the scenario:

A 60 year old woman walks into a field office in Puerto Rico to apply for survivor benefits. A Claims Representative takes the application but informs the woman that because of Government Pension Offset from her Puerto Rico pension, she is not actually eligible for any cash benefits. But some state pensions do not typically go up very much or very often (or ever) regardless of how high inflation gets. If we had told the woman not to apply until a later date, she would have been eligible for payments.

I brought the issue to my management. They sent it up the chain and received the following response:

“She would be out of luck unless she was somehow misinformed. I do not think there is a policy or some kind of duty to compel SSA employees to give this kind of advice to claimants….I am sure that it often does not occur to the claims taker that benefits may be available with a later filing and Month of Entitlement.”

She was quite obviously misinformed! By taking the application now, the claimant got nothing. If we had told her to check again in the future, she would have gotten cash benefits. There was absolutely no reason to take the application at the current time.

So the claimant is “out of luck” because “it does not occur to the claims taker” to understand the basics of month of entitlement? This is another entire class of cheated widows we need to identify and make right.

Sincerely,
John

My guess is there is upwards of a quarter billion dollars that Social Security has scammed from the public. Let me list the four scams about which I’ve written about in prior columns and above and add a couple more.

1. Calling people when they are 69 and offering them a bribe to take their Social Security benefits early without informing them that they will suffer permanently reduced monthly benefits as a result.
2. Simultaneously signing up widow(er)s for survivor and retirement benefits, when doing so produces no higher benefits now or in the future, but prevents the widow(er) from filing for their retirement benefit at, say, age 70, when they will be up to 76 percent higher adjusted for inflation and can, therefore, exceed the widows benefit after retirement.
3. Scamming spouses or ex-spouses who are grandfathered under the old, pre-2015 Social Security law to simultaneously take their spousal (or divorced spousal) and retirement benefits at full retirement age. Those grandfathered are those born on or before 1/1/1954. Taking both benefits at once produces no higher current or future benefits, but does deprive the beneficiary of waiting to collect potentially far higher benefits starting at, for example, age 70.
4. Signing up widow(er)s subject to the Government Pension Offset (GPO) for their Social Security survivor benefits early (e.g. at age 60) and, thereby wiping out their survivor benefits via the Government Pension Offset provision when having them wait until, for example, full retirement age, would have led to positive survivor benefits.
5. Signing up beneficiaries born prior to 1/2/1954 for either a spousal or a divorced spousal benefit or a retirement benefit without telling them about deeming, which requires you to take both spousal or divorcee spousal and retirement benefits at the same time. Such beneficiaries forfeited one of the two benefits, whereas waiting till full retirement age would have permitted them to take just a spousal or divorcee spousal benefit while waiting till 70 to collect their far higher retirement benefit.
6. Inducing beneficiaries to take their retirement benefits early by focusing them on their life expectancy, not their maximum age of life. Fortunately, this practice, which went on for decades, has been corrected. Social Security’s website now cautions participants against taking their benefits too early when they will start at permanently reduced levels. But there are tens of millions of older Social Security beneficiaries who were persuaded by Social Security’s previously highly misleading longevity language to make the wrong decisions.

Please keep an eye on this column. If one or more credible lawyers files a class action suit against Social Security on behalf of one of the six classes listed above or based on some other scam of which I’m unaware, I’ll write about it. For those not yet collecting, I strongly recommend an expert Social Security benefits calculator such as my company’s acclaimed Social Security lifetime benefit maximization software to make sure you have non-Social Security guidance/education on what to do to get the highest lifetime benefits. The software was not produced by, developed by, analyzed by, approved by, or otherwise reviewed by Social Security. That’s why it will keep you safe from Social Security.