Social Security Faces Blowback As Fraud Detection Flags Just 2 Claims — While Retirement Backlog Nears 600,000

A recent effort by the Social Security Administration to crack down on fraud has drawn sharp criticism after the agency found just two potentially fraudulent claims out of more than 110,000 reviewed. Meanwhile, nearly 600,000 retirement claims are now pending — some delayed for more than two months.

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Anti-Fraud Effort Delays Thousands of Claims

The SSA's fraud detection system, launched in April, was part of a broader policy shift encouraged by the Department of Government Efficiency, which had been headed by Elon Musk. According to Nextgov/FCW, the system flagged fewer than 1% of claims for fraud, and only two were deemed to have a "high probability" of being fraudulent. No confirmed fraud was found.

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The agency used tools from vendors like TransUnion and PinDrop to scan for suspicious activity in phone-based retirement, survivor, and family benefit claims. As part of the policy, a three-day hold was placed on these claims while fraud checks were completed — a delay that slowed claim processing by 25%, according to an internal SSA document obtained by Nextgov.

The result: longer wait times for applicants and growing dissatisfaction among SSA employees, many of whom were already working under reduced staffing and new processing demands.

Retirement Backlog Nears 600,000

At the same time, the SSA is experiencing an unprecedented surge in retirement claims. As of mid-May, there were nearly 575,000 pending applications, with about 140,000 of those waiting more than 60 days for resolution, according to an SSA email to employees that was reviewed by CNN. 

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Multiple factors are driving the spike. A record number of Baby Boomers are reaching retirement age. In addition, the Social Security Fairness Act expanded Social Security benefits for nearly 3 million federal, state, and local workers.

In the email CNN reviewed, SSA's Deputy Commissioner for Operations, Stephen Evangelista, called on employees to process 10% more claims per day in what he described as a "sprint" to reduce the backlog. However, the effort has been met with frustration from staff. 

"Employees find it to be another sign of disrespect," Joel Smith, a union representative for SSA workers in the South and Southwest, told CNN. "[Workers] weren't looking for another demotivational email from an agency leadership that cut their telework, encouraged them to quit and created an unnecessary backlog."

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Controversial Claims About Fraud

One of the main justifications for the anti-fraud policy came from statements made by officials at DOGE. For example, DOGE engineer Aram Moghaddassi claimed on Fox News that 40% of calls to SSA about direct deposit changes "come from fraudsters" — a statement repeated by Musk and Vice President JD Vance.

However, the SSA said in a statement that 40% of direct deposit fraud was associated with phone calls — not that 40% of all direct deposit phone calls were fraudulent. According to Nextgov, only 0.3% of the SSA's old-age, survivor, and disability insurance payments are considered "improper payments." And of that 0.3%, only a sliver of that consists of fraud. 

Policy Rolled Back — For Now

After growing backlash and little evidence of widespread fraud, the SSA has since rolled back the three-day hold on claims. A spokesperson told CNN the agency is refining its algorithm to focus only on claims with the highest probability of fraud, with the goal of balancing security with timely service.

Still, the fallout from the short-lived policy continues. With nearly 600,000 retirement claims still awaiting action, the SSA faces increasing pressure to prioritize customer service over controversial fraud prevention tactics — especially when the evidence doesn't support the need.

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