Lifeline operators like TracFone's SafeLink can either provide proof that it meet all the FCC's customer protection or service requirements or they can certify that they comply with the CTIA's Consumer Code. TracFone used the CTIA Code option, which, among other things, requires that beginning Feb 15, 2015, operators would disclose their unlocking policies to customers and unlock phones for customers who meet certain requirements. TracFone failed to meet the Feb 15 deadline for publishing an unlocking policy and for unlocking customers phones. In fact, TracFone is still refusing to unlock phones for customers.
The FCC took enforcement action against TracFone for its failure to follow the unlocking provisions of the CTIA Code. To settle with the FCC, TracFone has agreed that:
- By September 1, 2015, TracFone will provide clear notifications to its customers about its handset unlocking policy. All eligible consumers will get at least one text message telling them that they are eligible, and consumers can go to the TracFone website to determine eligibility, request pre-paid mailers for trade-in of locked phones, and obtain other relevant information.
- By September 1, 2015, eligible non-Lifeline TracFone customers can trade in their old device for a cash refund of the trade-in-value of the handset.
- By May 1, 2016, as TracFone begins to launch handsets capable of being unlocked, eligible nonLifeline TracFone customers can trade in their old device for an upgrade credit toward a new, unlockable handset.
- By May 1, 2016, TracFone must provide new Lifeline customers with phones capable of being unlocked. Existing, eligible Lifeline customers may request a replacement unlocked handset.
- TracFone will also provide a $400,000 per month offset to the Universal Service Fund until it provides unlockable handsets to new Lifeline customers.
- By December 31, 2016, all phones launched by TracFone must be capable of being unlocked.
- Refunds, upgrade credits and replacement handsets will be available under the program through at least June 2018.
The upgrade credits part of the agreement is interesting in that it requires TracFone buy back customer's old phones if TracFone is unable to unlock them.
To qualify for an unlock or buy back a customer must:
- Submit an unlocking request to TracFone
- Have used the phone on a TracFone service for 12 or more months. Deployed military personnel are exempt from the 12 months of service rule.
- The phone must have either be a model launched after Feb 11, 2014 or a phone first activated by the customer after Feb 11, 2015
- The phone must be in working order and not be reported lost or stolen or associated with fraudulent activity.
This is the second time this year that TracFone has been sanctioned by a government agency for anti-consumer practices. In January, the FTC fined TracFone $40 million for throttling or cutting off users data on plans that were advertised as including unlimited data.
I'm happy that the FCC took this action against TracFone, which was obviously not living up the unlocking policy it agreed to follow as a condition of receiving public finds to provide Lifeline service to low-income Americans. I'm hoping that the FCC considers similar action against Sprint, another Lifeline provider that's refusing to unlock many of its GSM capable phones like the iPhone 4s, iPhone 5 and Samsung Galaxy S5.
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