Finally, a settlement has been reached with regards to Tracfone Wireless’ bout with the Federal Communications Commission (FCC)’s Lifeline program.
The Department of Justice (DoJ) today released an update on the $13.4 million settlement that Tracfone agreed to pay as part of a civil settlement to resolve the allegations. It was alleged that Tracfone violated the False Claims Act by signing up over 175,000 ineligible customers between 2012-2015 to the program.
The Lifeline program was created as a way of helping low-income consumers with their cell phone bills. In order to be enrolled in the program, a customer needs to have an income below 135% of the Federal Poverty Guidelines. Another option is that the customer needs to receive benefits from specified federal assistance programs. If the customer is qualified for enrollment, they would receive a free cell phone and monthly service.
Unfortunately, it was discovered that the program was being frauded and mismanaged for years. On Tracfone’s part, the company hired independent third-party sales agents to enroll customers. And as explained by Fierce Wireless, the agents found a glitch on the MVNO’s computer software that allowed ineligible customers to be enrolled in the program.
Tracfone only discovered the software problem in August 2015. It has repaid over $10.9 million to Lifeline to date. This amount has been credited as part of the settlement.
“Today’s settlement reflects the FCC’s ongoing commitment to root out waste, fraud and abuse in its universal service programs,” said FCC Chairwoman Jessica Rosenworcel in a statement on Monday. “Especially during these unprecedented times, the Universal Service Fund provides a key lifeline for many families, and our careful stewardship of the program ensures that low-income households can access the telecommunications services they so critically need. Let today’s action serve as a warning to others that we will do everything we can to ensure strict compliance with the rules of the road.”
Apart from the $13.4 million settlement, Tracfone will be responsible for an extra $2.5 million in damages. The provider has also agreed to undergo a three-year compliance agreement, which will help ensure they are following the FCC’s rules for the program.
Verizon Wireless, who acquired Tracfone last year, said:
“Tracfone reported these activities to the government years ago and we’re pleased to now bring this matter to a close. At this point, the company is focused on bringing all of Tracfone’s customers, including those enrolled in Lifeline, best in class products and services at very competitive prices.”
You can read the DoJ's statement here.
Source: Fierce Wireless
