News Release

Social Security Commissioner Reacts
To Federal Record Service Civil Suit

Kenneth S. Apfel, Commissioner of Social Security, commended the U.S. Attorney's action to file a civil suit in U.S. District Court in the Southern District of New York against Federal Record Service Corporation.

Filed in Manhattan federal court, the suit alleges that Federal Record Service misleads and defrauds the public through solicitations for services that purportedly assists people in obtaining Social Security cards for newborns or replacement cards for newlyweds. Federal Record Service charges citizens a $15 fee for services that can be obtained for free from the Social Security Administration (SSA). Many consumers have complained that the mailings led them to believe that they were being contacted by SSA or a company affiliated with SSA.

"For far too long, Federal Record Service has been picking the pocket of the American public through deceptive practices in an effort to sell an unnecessary service," Commissioner Apfel said. "Today's action by the U.S. Attorney proves that the Federal Record Service can run, but it can't hide from the law."

In the suit, U.S. Attorney Mary Jo White charged that Federal Record Service, in their solicitations for a fee, convey the false impression that their services are approved, endorsed, or authorized by SSA. The suit further alleges that the solicitation fails to inform the consumer that Social Security numbers are generally assigned as a part of the birth registration process and that newlyweds can obtain a replacement card to change their names without charge by dealing directly with SSA.

U.S. District Judge Barbara S. Jones, U.S. District Judge for the Southern District of New York, issued a temporary restraining order directing Federal Record Service to cease disseminating the solicitations, freezing the corporation's assets, and authorizing the U.S. Postal Service to detain incoming mail from consumers. Judge Jones has scheduled a hearing on May 13, 1999 at 10 a.m. to determine what further action is appropriate.

SSA's Office of the Inspector General (OIG) has been instrumental in investigating and compiling information relating to Federal Record Service solicitations.

"We have received more complaints against Federal Record Service Corporation than any other company in the history of the OIG, SSA," James G. Huse, Jr., Acting Inspecting General, SSA, said. "Today, we are taking aggressive action to stop Federal Record Service Corporation from misleading the public with deceptive Social Security-related solicitations."