FCC Hands Down $51M Fine in Lifeline Scam

FCCThe Federal Communications Commission (FCC) is handing down a massive fine to a telecom company that defrauded the government of nearly $10 million. The FCC announced the $51 million fine against Total Call Mobile in a press release last week, alleging the company signed up tens of thousands of duplicate and ineligible consumers to the Lifeline program.

“We reserve the strongest sanctions for those who defraud or abuse federal programs,” said Enforcement Bureau chief Travis LeBlanc, in the press release. “Any waste, fraud, or abuse in the Lifeline program diverts scarce funds from the consumers they are meant to serve and undermines the public’s trust in the program and its stewardship.”

The Lifeline program offers phone service to low-income consumers at a reduced rate, allowing them to connect with jobs, family and emergency services. Eligible phone service providers receive $9.25 per month for each consumer receiving the service, with the intent of passing on the reimbursement to the customer. The Total Call Mobile fine is the largest ever handed down for Lifeline infractions.

“The Commission alleges that since 2014, Total Call has requested and received an estimated $9.7 million dollars in improper payments from the Universal Service Fund for duplicate or ineligible consumers despite repeated and explicit warnings from its own employees, in some cases compliance specialists, that company sales agents were engaged in widespread enrollment fraud,” states the release.

Total Call Mobile offered the service in at least 19 states. An Enforcement Bureau investigation found the company was aware of issues surrounding duplicate enrollments up to a year before authorities raised the issue with Total Call. In late 2014, there is evidence as many as 99.8 percent of the company’s enrollments were made by overriding the third-party verification system designed to catch duplicates.

One sales agent was arrested and charged with identity theft after they allegedly used ID from a stolen wallet to register 10 Lifeline cell phones. When the agent was taken into custody they had 12 additional Lifeline cell phones and the stolen wallet in their possession.

In addition to the fine, the FCC says it may take action to strip Total Call’s authorizations to operate as a common carrier and Lifeline provider.