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FCC Proposing a $6 Million Fine for Tracfone's Alleged Lifeline Fraud

It looks like Tracfone Wireless, Inc. is in trouble with the Federal Communications Commission (FCC).

Just recently, the government agency filed a 19-page "simple" complaint against the telecom company. According to the complaint, Tracfone filed Lifeline reimbursement from the government for fabricated and ineligible subscribers. The agency intends to impose a $6 million fine for the violations made by Tracfone.

This complaint was made after the FCC discovered that Tracfone Wireless, Inc.'s agents did business as (DBA) SafeLink Wireless in 2018. They fabricated subscriber data in Florida and solicited reimbursement for the ineligible subscribers in Texas. Tracfone owns Safelink Wireless, along with other brands like Walmart Family Mobile, Straight Talk Wireless, Total Wireless, and many more.

The alleged fraud gave Tracfone government reimbursements amounting to $1.2 million. This money, however, has long been returned to the government. According to the FCC's complaint, Tracfone admitted that its sales agents enrolled fictitious accounts into the program in Florida. Allegedly, Tracfone discovered the practice being done by its sales agents, who earned a commission on those sales. In return, Tracfone benefited from the fraudulent activity by receiving the government subsidy for these subscribers.

The US government launched the Lifeline program for low-income consumers to have access to wireless, wireline, and broadband internet services. In order to qualify to receive Lifeline assistance, a consumer must have an income that is below 135% of the Federal Poverty Guidelines. They also need to participate in some federal assistance programs, like Medicaid.

The program gives a monthly discount of up to $9.25 on these services. The discount is paid to the businesses in the form of government subsidies. With Tracfone's alleged fraud, they ended up keeping the $9.25 per month for themselves for the eligible subscribers in the program.

As of this writing, SafeLink Wireless offers Lifeline services to around 2.4 million subscribers. When the alleged fraud took place, the company had over 2.8 million subscribers based in 42 states, with an overclaimed $229,483 worth of support from the Lifeline program.

Source: BestMVNO 

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