BP cuts payments to 40,000 because of paperwork problems

BP said that it will cut payments on 40,000 of the 99,508 claims because of problems with paperwork. BP also stated that it will decrease payments to individuals whose claims were incomplete. Many criticize the latest debacle as just more irresponsibility on BP's part.

Handling so many claims can lead to errors which slows down the process. BP must make sure that all claims are legit; especially considering fraud.

In an urgent letter to BP, Kristy Nichols, secretary of Louisiana's Department of Children and Family Services suggested that BP accept alternate forms of identification to speed up the claims process. She also mentioned that BP should seek help from the state to fill any holes regarding documentation so that all families, many of whom are in financial distress from the spill, can quickly get back on their feet. In her letter, Nichols seems outraged that BP made such a crucial decision without consulting with the state's emergency department.

Under Nichols' guidance, the state of Louisiana set up a third-party analysis which found numerous gaps in BP's claim processing. One major problem is how BP classifies recipients, especially small business owners. For example, captains of ship vessels in the Gulf are not specified as small business owners despite having to purchase new vessels after they were damaged by Hurricanes Katrina and Gustav. These captains have to keep up with monthly payments of $5,000 in addition to living expenses.

Kenneth Freinberg, BP's claims administrator, is scheduled to visit Louisiana next week. Nichols requested that he submit a timeline on providing claims data prior to his arrival.

If you're a Gulf Coast resident seeking to claim money from BP's $20 billion fund, check out WalletPop's tips on how you can file a claim.