FCC: TracFone made up “fictitious” customers to defraud low-income program
FCC proposes $6M fine, says TracFone “fabricate[d] enrollment data” to get cash. …
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TracFone Wireless is facing a potential $6 million fine for allegedly defrauding a government program that provides discount telecom service to poor people.
The Federal Communications Commission proposed the fine against TracFone yesterday, saying the prepaid wireless provider obtained FCC Lifeline funding by “enroll[ing] fictitious subscriber accounts.” TracFone improperly sought and received more than $1 million from Lifeline, the FCC said.
The FCC press release said:
TracFone’s sales agents—who were apparently compensated via commissions for new enrollments—apparently manipulated the eligibility information of existing subscribers to create and enroll fictitious subscriber accounts. For example, TracFone claimed support for seven customers in Florida at different addresses using the same name, all seven of whom had birth dates in July 1978 and shared the same last four Social Security Number digits. The Enforcement Bureau’s investigation also found that, in 2018, TracFone apparently sought reimbursement for thousands of ineligible subscribers in Texas.
Today’s proposed fine is based on the 5,738 apparently improper claims for funding that TracFone made in June 2018 and includes an upward adjustment in light of the company’s egregious conduct in Florida.
The FCC’s Lifeline program, which is paid for by Americans through fees imposed on phone bills, provides monthly subsidies of up to $9.25 per household for phone and broadband service provided to eligible low-income subscribers.
FCC Chairman Ajit Pai said the commission “will not sit idly by and let Lifeline carriers fabricate enrollment data to generate more sales.” Pai also said he is “hopeful that our new rule prohibiting carriers from paying commissions to employees or sales
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