Killing the goose that laid the golden egg: Wall Street Journal reports on free government cell phone fraud

We’ve often warned about the dangers of fraud in the free government cell phone program. Now an article in the highly respected Wall Street Journal reveals just how dangerous the problem has become.

We consider it a warning that honest participants in the program need to do everything they can to root out the dishonest participants.

Lifeline, the free government cell phone program’s official name, spent $2.2 billion in 2012 to provide free government cell phones to low-income Americans. Unfortunately, the WSJ’s investigation suggests that many customers who received the phones may not be eligible for them.

As the number of wireless carriers offering the program has increased, the program’s budget has skyrocketed from $819 million in 2008 to $2.2 billion in 2012.

The Wall Street Journal reported the unfortunate news:

Suspecting that many of the new subscribers were ineligible, the Federal Communications Commission tightened the rules last year and required carriers to verify that existing subscribers were eligible. The agency estimated 15% of users would be weeded out, but far more were dropped.

A review of five top recipients of Lifeline support conducted by the FCC for the Journal showed that 41% of their more than six million subscribers either couldn’t demonstrate their eligibility or didn’t respond to requests for certification.

The carriers—AT&T T +0.56% Inc.; Telrite Corp.; Tag Mobile USA; Verizon Communications VZ +0.41% Inc.; and the Virgin Mobile USA unit of Sprint Nextel S -0.51% Corp.—accounted for 34% of total Lifeline subscribers last May. Two of the other largest providers, TracFone Wireless Inc. and Nexus Communications Inc., asked the FCC to keep their counts confidential.

Of course, an inability to demonstrate eligibility doesn’t necessarily translate to ineligibility, but 41% is a significant number that casts a terrible shadow of doubt on the future of the program. If fraud within the program actually approaches that number we will see in increasing number of politicians and talk show hosts demanding that the program be curtailed or even ended.

Millions of honest, needy Americans depend on the free government cell phone program. It’s vital to their ability to get jobs and get off government welfare programs.

So we again call on honest Lifeline customers and non-customers to report anyone they suspect of cheating the program. Speak up. Save the free government cell phone program for those who really need it, for those it was intended for.

Save the program. Report the cheaters.

Source: WSJ


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  1. David says

    Turning in neighbors, friends, and family is true Homeland Security, Nazi style. Are we really that immoral? Better to stand up and talk directly to the person your worried about, harder though that is, and let their conscience be their guide.