The Federal Communications Commission wants to hand out more than $14 million in fines to wireless operators it claims defrauded the government out of fees related to the Lifeline subsidized phone program. The Lifeline program was started in 1985 and is the part of the universal-service program aimed at providing low-income consumers access to telecommunications.
The FCC said it plans to fine five companies a total of $14.4 million connected to the fraud claims, noting those companies signed up thousands of consumers for multiple subsidies despite rules the limit one subsidized offer per customer. The companies named include TracFone Wireless, Assist Wireless, Easy Wireless, Icon Telecom and UTPhone.
“Collecting support for duplicate Lifeline service – the practice we address in these cases – is not only illegal, it diverts resources from legitimate users of the program and is unquestionably within the power and duty of Lifeline providers to prevent,” said Acting FCC Chairwoman Mignon Clyburn in a statement. “It must stop.”
TracFone, which is one of the nation’s largest prepaid providers with more than 20 million customers, said it did not “believe that our conduct violated any rules,” but seemed to leave the door open to that possibility. The company noted that the FCC claims involved less than $8,000 in billing and less than 850 people. TracFone, which in 2005 was granted the ability to participate in the Lifeline program, claimed to have nearly four million customers through the Lifeline program.
“Our goal at TracFone Wireless has always been to do whatever it takes to clear up any such issues as expeditiously as possible,” the company noted in a statement. “We will have no additional statement on this matter until we submit our response to the FCC.”
A number of wireless carriers participate in the Lifeline program, including Sprint through its Assurance offering and Leap Wireless.
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