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
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."