The FCC loves to pay itself on the back for the work it does to eliminate fraud, waste and abuse in the Lifeline free government cell phone program. This generally consists of finding little old ladies with two government-subsidized cell phones or tracking down a household with multiple Lifeline accounts.
That’s all small potatoes compared to the billions of dollars worth of fraud they just uncovered at Sprint.
FierceWireless.com has the details:
The FCC on Wednesday announced that T-Mobile will pay a $200 million penalty to the U.S. Treasury to settle an investigation into Sprint’s misuse of the federal Lifeline program for collecting federal subsidies for inactive users. According to the FCC, the penalty is the largest ever fixed-amount settlement it has secured to resolve an investigation.
Sprint’s Lifeline issues at hand and the resulting investigation began last year as the company was still working to win merger approval with T-Mobile, and was first flagged by the Oregon Public Utility Commission.
The carrier had been claiming monthly subsidies under the Lifeline program for 885,000 subscribers, even though they were inactive and not using the service, violating the commission’s “non-usage” rule, an investigation by the FCC’s Enforcement Bureau found.
Our readers regularly leave comments in which they complain that they cannot get their service providers to cancel their service. Sometimes they want to switch companies, other times they no longer qualify for the Lifeline program, and sometimes they just plain don’t want to participate int the program for one reason or another. We usually tell them that there are a number of ways to end your service. (1) Contact your service provider’s customer service team to cancel your account. (2) Don’t use the Lifeline cell phone for 30 days at which point service should be automatically cancelled. And (3) Don’t re-certify that you are eligible when the anniversary of your enrollment comes around. Any of these actions (or lack of action) should automatically cancel a Lifeline account.
The government pays each Lifeline service provider $9.25 per month for each active customer. It’s a perverse system that encourages cheating and incentivized service providers to keep customers enrolled even when they no longer want nor need the service.
How bad was the fraud? FierceWireless.com calculated the damage:
Sprint delivers wireless Lifeline service to millions of households under the brand Assurance Wireless. At the start of the investigation, the FCC said the 885,000 inactive Lifeline subscribers Sprint was getting paid for represented 30% of the carrier’s total Lifeline base and a full 10% of the entire Lifeline program’s subscribers.
As part of the announcement today, the FCC said Sprint agreed to enter into a compliance plan to make sure it follows the commission’s Lifeline rules in the future.
… From the start Sprint said it was committed to reimbursing federal and state governments for any subsidy payments that were collected as part of the error.
And while the $200 million is a record penalty, according to the FCC, it’s a far cry from investment analysts’ estimates at New Street Research last fall that said in addition to reimbursements, Sprint could face fines totaling in “the low billions of dollars.”
Scam the government out of billions, pay a penalty of millions.
Is this a great country or what?
h/t: FierceWireless
Traci Kennard says
My account has been used and I’m receiving all kinds of text, email and unknown calls! My number is 33044***** my email and phone number to my other phone which has been compromised is 33054*****
Free Government Cell Phones says
We’re not your service provider, Traci. You need to contact its customer service team directly.
Melinda Z. says
I have had Q Link for years and the service has been horrible. If you have any kind of issue or complaint, you are sent canned emails or worse, banished to their India-based “customer service representatives” who cannot even understand basic English. Worse than that, you are often subjugated to wait times of 2 hours-plus on the phone just to get to talk to someone that (a) cannot understand you, (b) does not CARE to understand your issues and (c) that you cannot understand. In all facets, their customer support is worthless.
Q Link recently switched to T-Mobile’s network and unceremoniously disconnected my previous lifeline cell phone from Sprint’s network, leaving me with NO SERVICE. There was no text, no email, no nothing warning me of the imminent cut-off. Instead, I was directed to buy a new phone from their website (a free phone choice was NOT provided). Once I received the new phone I paid for and their sim card, I found out that since my old phone had been disconnected by Q Link, that my previous phone number, that everyone knew me by, was no longer available.
So, I was forced to get a new phone number… but, that’s not the end of the nightmare – no, far from it. When I activated my new phone, I found something very odd. I could only access mobile data if I used Google search, and nothing else. I could search for anything and get real-time results (meaning it was not dependent on the cache) BUT if I clicked on any link, it would tell me “not connected to the internet”. It turns out that new cell phones will sometimes connect to specific sites (like Google) just to provide proof that the cell phone’s mobile data capabilities do, indeed, work. Unfortunately, that doesn’t help you if you actually want to use ANY OTHER APP besides the Google search bar. In fact, no other app works with the mobile data in this instance.
After SIX WEEKS of contacting Q Link’s India-based “tech support”, one Indian lady finally told me that even though T-Mobile’s service map showed me fully covered by either 4 or 5G, that I was indeed somehow NOT covered for data with Q Link
So, now, two months later, I’m trying to switch to another lifeline provider but I’ve run into yet another snag. Apparently, there’s no record of my original lifeline application on file at the lifeline verifier. it TELLS me that i have an account, but there’s no actual application number on file. Apparently, if you filed a paper application years ago, it may not appear in their database. So, the lifeline customer service people (who thankfully are actual Americans), told me that I needed to start a new application – so I did. However, the lifeline verifier site tells me that I already have an account (which I already knew). However, because I need that actual application number, you know, “Q and then 10 numbers”, I entered a new account. So, now I have 3 different lifeline accounts, apparently, only one of which is really valid.
I’ve been told I need to contact the new provider (which also has India-based customer support and NO possible other option) and have them switch from Q Link to their service using the new application number. At this point, I am skeptical I will ever have mobile data from lifeline, even though my phone is unlocked and I can insert any sim card into it. it just seems like a never-ending nightmare perpetuated by companies looking for free money from the government.
I just wanted to share my experience.. thank you for the opportunity.
Free Government Cell Phones says
Wow. Just wow. The horror stories just keep rolling in.
lynn chaken says
I began Lifetime free phone service almost a year ago, received a free phone that never ever worked and was defective. I recently read this was not uncommon, and that many Assurance smart phones were pre-set with malware, suspected as originating from China. All reviews for all companies providing free service for eligible Lifeline participants have terrible reviews, rating 1 or 2 stars, if that. They are all subsidized by the government and cheating them and us as well as what they provide is not useable in the main. Thankfully Sprint, a billion dollar company, owning Assurance Wireless. is the first to be held accountable.
We all need to make our voices heard…contact your senators and congressmen and advocacy groups!
Chuck says
So sprint gets fined millions. Is this the actual amount they received from fraud? Or who gets the excess of the fine? Just like when you go to court and get fined, and restitution (if court orders so), where does the money (once paid) go? Right into the justice systems pocket. Hope this explains why the legal system is very eager to bring you in for any reason, and why lawyers are recommended when they read you your miranda rights. If the courts dont bankrupt you, the lawyers will soak up the rest. In my experience, the victim is the financial loser, this being the end users who never received services that were probably needed as a LIFELINE! Wonder how many death certificates were created due to this fraud. This should have been a class action suit, with all concerned parties notified that their personal information was being used fraudulantly and should be compensated accordingly. But that would cut into the spoils, and besides we the people who initially funded the government via taxes dont deserve any of it. So where does the money go if the government does receive restitution?
Henry says
My guess is that the fine monies are deposited to the general US Treasury fund. The US budget deficit is over 2 trillion dollars. The penalty funds will make a tiny dent to the budget deficit.
BRENDA R says
USA corporations pay penalties for scamming the government, (maybe) but a citizen will typically go to jail, after they are stripped of every last dollar. How will any of us know if Sprint actually pays this penalty? We won’t.
Henry says
The list of FCC fines over the past ten years have seen several providers making money through fake enrollments, ineligible enrollments, duplicate enrollments, etc., on the Lifeline program. This is what I came across reading the FCC lawsuit information.
Cintex Wireless – 9.4 million
Life Wireless – 22.4 million
StandUp Wireless – 11.7 million
Sprint/T-Mobile./Virgin Mobile – 200 million
Total Call – 51 million
Safelink – 6 million
American Broadband – 63 million
This might be the “tip of the iceberg”.
Free Government Cell Phones says
That’s a pretty deep “tip,” Henry.
Chad A. Austin says
They scammed me and the lifeline. I have had no phone. They sent a defective one and refuse to replace it without charging money. What do I do? I’m not paying for a new phone. They also treated me like some bum. I’m just struggling through the covid-19 issues. Clearly scamming for who knows how much. Sending phones valued at about 10 cents that will never work. How many people have they done this too. They misinform me with every email. I have it saved.
Free Government Cell Phones says
Have you spoken directly with customer service or dealt with them through email. If you’ve spoken to an agent and not gotten any help, call in again and ask to speak to a supervisor.
De says
Why is my spring boost now selling me to a 3rd party ? They sell the signal. Is this legal??
Free Government Cell Phones says
Companies seem to swap customers and service regions all the time.