FCC found TracFone violated device-unlocking rules for Lifeline customers
TracFone Wireless ran afoul of the Federal Communications Commission’s device unlocking requirements tied to its Lifeline service offerings that could cost the prepaid provider more than $83 million.
The FCC’s Enforcement Bureau found that TracFone violated FCC rules by improperly certifying that it would unlock devices for customers enrolled in its government-subsidized Lifeline program, which became mandatory on Feb. 11. The FCC said its investigation found TracFone “repeatedly certified in official agency filings that it would abide by a wireless industry code of conduct … [that] required handset unlocking for the company’s customers enrolled in the FCC’s Lifeline program, but failed to live up to that commitment.”
As part of the settlement, TracFone said it would allow eligible customers to receive a new unlocked device, credit for a handset upgrade or a “partial cash refund or exchange” for their locked handset. The FCC claimed the settlement could impact up to 8 million TracFone customers with an average “benefit” of $10 per handset. TracFone is also on the hook to provide $3.2 million in projected cost offsets to the Lifeline program connected to “how quickly its unlocking program becomes active.”
The settlement also requires that by Sept. 1, TracFone provide customers with at least one text message notification of its handset unlocking policy; and provide eligible non-Lifeline customers the ability to trade in their current device for a cash refund for the trade-in value of the handset.
By May 1, 2016, TracFone is required to make available unlockable handsets and allow for non-Lifeline customers to trade in their current devices for an upgrade credit toward a new device; and provide new Lifeline customers with access to the unlockable devices as well as current Lifeline customers with a replacement unlocked device.
TracFone is also required to pay a $400,000 fine per month beginning in October to the Universal Service Fund until it provides the unlockable handsets to new Lifeline customers.
The settlement applies to TracFone’s Straight Talk, Net10 Wireless, SafeLink Wireless, Telcel America, Simple Mobile and Page Plus Cellular brands offered in the U.S.
TracFone, which is owned by Mexico-based telecom giant América Móvil and offers prepaid services running across various domestic networks, has a long history of issues with device unlocking. The company had previously won court cases preventing independent retailers from unlocking its devices for reuse on other networks. TracFone had previously been dinged by the FCC for Lifeline violations connected to fraud claims against the federal government.
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