BP gets stricter with claims

claims_office.gi.top.jpgPeople wait in line to file claims with BP at an office in Alabama. By Catherine Clifford, staff reporter

NEW YORK (CNNMoney.com) -- BP is becoming increasingly stringent with its demands for documentation from victims filing claims for lost wages and income in the Gulf region.

Immediately following the spill, many initial payments were distributed in uniform amounts with minimum documentation based on estimates. Now, BP will make payments based on each claimants' documented losses.

As a result of the tightened standards, some claimants could get more money than the standardized industry check they have been receiving while others could get less.

And those claimants that are already in the claims system but have yet to submit the necessary documentation will get a $1,000 "good faith" check for July as they continue to gather papers, but they will not get full payment until proper documentation has been submitted.

Once a claimant submits the necessary documents, if they show that the victim is due more than the $1,000 advance payment for July, BP said it will provide a supplemental payment to make up the difference.

Claimants can submit documentation - tax returns, trip tickets or pay stubs - to BP through the mail, by fax or at one of the 35 claims offices located throughout the Gulf.

"If individuals have not given us supporting documents, we need them," said Darryl Willis of BP's Claims Team, in a company statement released Wednesday. "For many it has been 45 to 60 days, and we would like to ensure that we are paying them for the income they have lost."

There will be no "good faith" payments after July. To be paid in August and beyond, claimants must provide verification of their income with documentation.

BP is not shutting the door on filers, however. If a claimant gets all of the documentation together in October for losses incurred in June, for example, BP will honor the backdated claim. "From our point of view, people can backdate claims as long as they want," said Max McGahan, BP spokesperson. "If they have documentation, we will pay out the claims."

Even if BP is patient, however, a claimant needs to be aware of local statute of limitation laws, which vary on a state-by-state basis.

In the first months after the oil spill, BP cut checks to victims based on estimates without requiring extensive documentation. For example, boat captains that ran a crew got a $5,000 initial check and deckhands got $2,500. But starting with advance checks cut for July, dollar amounts will be much more specific.

"We are going to make a more precise payment which reflects their actual loss," said McGahan. Checks "will also reflect the seasonality of the fishing industry."

Fishermen earn the bulk of their annual pay in a few peak months that vary depending on the particular seafood being caught. When they submit their paperwork, those variations will be accounted for.

BP has paid out $157.6 million in nearly 51,000 checks as of Thursday. More than 100,000 total claims have been submitted to BP, but meanwhile, more than 45,000 claims are sidelined, awaiting further documentation.

As BP tightens its demand for documentation, the company insists it is not trying to shortchange any claimants.

"The idea is not to reduce how much we are paying out in claims. We are trying to make a more sophisticated system," said McGahan. "To do that, we need some documentation; it has to be based on something."

Even as BP works to refine its process, it won't be in charge for that much longer. The former special master of the September 11th Victim Compensation Fund, Kenneth Feinberg, has been appointed to oversee the claims process.  To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Questions & Answers

QHow does a florist sell more in this economy? We changed our business to designing weddings and events only, as the everyday flowers are not selling. We had to throw out too much product at the end of the week -- flowers are perishable! More
Get Answer
- The Flower Lady, Suwanee, Ga.
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:


Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.