Social Security is a foundational piece of retirement income planning for most Americans. It’s often one of the only guaranteed income sources they will have in retirement. Making the right decisions when it comes to filing for benefits can have lifelong consequences. Consumers often turn to their financial professionals to help them sort through the process.
The Problem
If you market Social Security planning as part of your service offerings you need to understand the regulatory landscape. Regulators at both the state and federal levels have laws that must be followed. The potential consequences of a regulatory misstep can be costly, in terms of dollars, time, and reputation.
The Cost
The Office of the Inspector General (OIG) for the Social Security Administration has created Section 1140 of the Social Security Act, a consumer protection tool designed to protect SSA recipients against misleading advertising. They actively review industry sales practices and frequently bring enforcement actions.
According to their website, “As of January 2019, people found in violation of Section 1140 are subject to civil monetary penalties of up to $10,519 for each violation, and a penalty of not more than $52,596 in the case of such misuse related to a broadcast or telecast.”
The potential consequences of a regulatory misstep can be costly, in terms of dollars, time, and reputation.
Some recent examples of SSA enforcement actions include:
- A Missouri company paid $35,000 and $10,000 in penalties for misleading lead card mailings containing references to SSA and discussing Social Security-related issues in a misleading manner
- Another company paid penalties of $7500 to settle URL and website claims that they violated the Act through the use of the URL SSNRecords.org and the website’s use of an emblem containing the words “Social Security Records,” an image of government-columned building, and the U.S., as well as a flag in a manner that conveyed a false impression of a connection with SSA.
- A Kentucky law firm paid a $7,500 penalty for misleading signage for placing a “Social Security Sign- Up Office” signs at two of its law office locations, implying an affiliation with the SSA.
The Solution: How can you effectively promote social security services?
AN OUNCE OF PREVENTION…is worth a pound of cure. So how can you effectively promote your ability to help consumers understand how Social Security fits into their overall retirement income plan without taking on undue risk? Here are three tips:
1. Identify Yourself Properly
Consumers need to know, at all times, who you are and what you offer. As an insurance-licensed professional, clearly disclose your capacity as such. Be sure to use legitimate titles such as “Insurance Agent” or Insurance Professional” to clarify your primary business and include verbiage that explains that you offer insurance products and services.
- Avoid using titles or job descriptions that suggest you are a Social Security Planner or expert
- Don’t give the impression that you are affiliated with or endorsed by the US government.
- Don’t use the words “Social Security” in your title or as a descriptor of your services.
As a licensed insurance professional, the only services you are selling are the products and solutions you provide to address consumers’ financial and income needs, and this needs to be evident in your advertising.
Also, clearly disclose who you’re not.
- Social Security marketing materials should clearly and prominently state that you are not affiliated with Social Security or any other government agency.
- Disclosure is especially important on lead generation materials and mailers, as these materials often have the potential to confuse recipients as to the nature of the solicitation.
- If you are utilizing the services of a third-party lead generation firm, be sure to review the materials they will mail out on your behalf because you can be held liable for any sales practice or advertising violations even if you do not create or distribute these materials yourself.
2. Pay Attention to the Visuals
Consumers shouldn’t confuse you with the government
The SSA expressly prohibits the use of SSA symbols, photos or pictures in advertisements, solicitations, or other communications, “… in a manner that conveys the false impression that such item is approved, endorsed, or authorized by SSA, or that such person has some connection with, or authorization from, SSA.”
- Avoid using visuals such as a government building, a SS card, American-like items such as the American flag, the eagle, or Uncle Sam.
- Don’t use forms or mailers that have a similar look and feel to similar communications from the US government
- Avoid website URLs that include potentially misleading terms or phrases (for example, “socialsecurityplanning.com”), which could imply an affiliation with the SSA.
3. Promote Only What You’re Licensed to Offer
As an insurance professional, consumers should only see promotions of products and solutions you can provide.
Numerous individuals and entities have been penalized for advertising services that are disingenuous in nature, at best, and often deemed a scam by the SSA.
For example, promoting the sale of common Social Security forms, such as an application for a Social Security card. These documents are available for free from the SSA, so the sale of them is problematic and implies an affiliation with the SSA.
As a licensed insurance professional, the only services you are selling are the products and solutions you provide to address consumers’ financial and income needs, and this needs to be evident in your advertising. Interested in leveraging Marketing to reach more clients? Stay on top of regulatory updates. Review additional regulatory guidance on the SEC Advertising Marketing Rule as explained by a marketer.
