Challenging Collection of an Overpayment
The FAA sent you a Notice of Indebtedness explaining you received an erroneous payment and stating the amount and basis of the debt. The FAA follows up with a Bill of Collection for the amount of overpayment. What can you do to challenge the collection? You can contest the amount and/or request a waiver of overpayment.
When the FAA sends you a Bill for Collection, the Bill should advise of repayment options (e.g., repayment in full, repayment through payroll deductions, repayment through a satisfactory repayment arrangement) as well as the process for contesting the amount (a petition for a hearing or a request for review) and requesting a waiver of overpayment. The collection and waiver process is found in FAA Order 2770.2G.
If the amount is correct and you plan to pay, determine the best option to timely meet the obligation.
If the amount is correct but you want the debt excused, you should request a waiver. You must file the waiver prior to the due date specified in the Bill for Collection. If a waiver is requested, the FAA will suspend debt collection proceedings under 49 C.F.R. Part 92 until final agency action on the waiver. (FAA Order 2770.2G). A waiver request submitted before the due date in the Bill for Collection will be interpreted as a concession that the payment is due.
If you believe the amount is incorrect, you may petition for a hearing or request a review to challenge the validity of the debt. There are strict timeframes for petitioning for a hearing as well as for requesting a review within FAA Order 2770.2G. Be sure to review the FAA’s correspondence to you and consult the FAA Order when disputing the validity of the debt in order to ensure a timely challenge.
If the validity of the claim is disputed and you want to seek a waiver of the debt, a waiver request should not be submitted before final agency action determining the validity of the debt. After a final agency action regarding the validity of the debt that is unfavorable (does not result in the debt being cancelled or the agency’s claim being withdrawn), you must timely seek a waiver of the debt if you want the debt to be excused. There is a strict filing deadline to request a waiver after the final agency action on the validity of the debt. Again, be sure to review the FAA’s correspondence to you and consult FAA Order 2770.2G to ensure a timely request for a waiver of overpayment at this stage.
FAA Order 2770.2G states that a federal employee’s debt may be waived if he/she can demonstrate that collection would be against equity and good conscience and not in the best interest of the United States. There must also not be an indication of fraud, misrepresentation, or lack of good faith on the part of the employee or any other person having an interest in the waiver of the claim. The FAA Order defines fault as more than a proven act or omission noting that fault may be found if the person requesting the waiver knew or should have known the error occurred and failed to alert the appropriate officials.
When drafting a response, list applicable arguments such as equity, good faith and lack of fraud, misrepresentation or fault. Another possible argument may be lack of experience in payroll to support the argument that you should not be held accountable for the FAA’s mistake. Be sure to state that if the agency refuses to grant your request for an overpayment waiver, at a minimum, you request that any administrative charges, interest and penalties on the debt be waived. (While the FAA may waive administrative charges and penalties, interest accrues unless a waiver is granted.) Advise the FAA of your expectation that any collection efforts will be stayed until final agency action on the waiver request pursuant to 49 C.F.R. Part 92 and FAA Order 2770.2G.
If the waiver is denied, you have the opportunity to file an appeal by a specific deadline. Check the FAA’s correspondence and the FAA Order in order to file a timely appeal. In filing an appeal, be sure to challenge the reasons that the FAA gave in denying your waiver. Request that at a minimum, any administrative charges, interest and penalties are waived in the event the appeal is denied. Once again, remind the FAA that any collection efforts should be stayed until final agency action pursuant to 49 C.F.R. Part 92 and FAA Order 2770.2G.
If no appeal is timely submitted, the decision on the waiver is the final agency action on the waiver request. If an appeal is timely submitted, the decision on the appeal is the final agency action on the request. After final agency action denying a waiver, then you are responsible for payment. Contact your facility representative to assist you in responding to a Bill for Collection.