TracFone to Pay $23.5M for FCC Violations

TracFone has made a settlement agreement with the FCC to resolve allegations of violation of the rules of the government assistance programs meant to help financially depressed people.

Here are the details of the news.

TracFone To Pay $23.5M For FCC Violations

On Wednesday, the United States communication regulatory body Federal Communication Commission (FCC) announced that TracFone, a wireless mobile operator, has agreed to a settlement to remove charges that it violated the rules of two government assistance programs, the Lifeline program and the Emergency Broadband Benefit (EBB) program.

The Lifeline program provides free government phone and discounted phone services to low-income people, and EBB provides a discount on broadband Internet service for eligible households.

In addition, the EBB program offers a $100 discount to get a free government tablet. However, the program has now been replaced by the Affordable Connectivity Program, and TraceFone is one of the providers who shifted to this program and called it the TraceFone Affordable Connectivity Program.

The FCC informed that in the settlement, Tracfone has agreed to pay a $17,487000 million civil penalty and an additional $6,013,000 million to settle a 2020 Notice of Apparent Liability (NAL) for other possible Lifeline violations charges.

In addition, TracFone has agreed to execute multiple compliance measures to prevent further violations of the rules of Lifeline and EBB programs.

In a statement, Loyaan A. Egal, FCC enforcement bureau chief, said, “Whether attributable to fraud or lax internal controls, or both, we will vigorously pursue allegations of misconduct that harms critical FCC programs designed to help those most in need of communications-related services. ”

“This settlement sends a strong message that we are determined to protect the integrity of these programs. I want to thank the Enforcement Bureau’s Investigations and Hearings Division for its outstanding work on this matter.”

The FCC’s Enforcement Bureau investigated Tracfone’s procedures for determining customer usage of lifeline benefits. It was found that Tracfone had violated the rules of these programs in many ways.

In the investigation, the company disclosed that its internal processes allowed Lifeline benefits such as TraceFone free government phone and phone services claims for people who had not used the services in the first 30 days.

This violates the FCC rules for the Lifeline that mandate the use of the Lifeline benefits at least once every 30 days to continue receiving them. Customers failing to use their lifeline service in 30 days cannot continue getting the services.

Overall, the investigation disclosed that Tracfone’s internal systems enroll ineligible customers for these government programs, and the company has failed to record and report the use of program funds properly.

TracFone Wireless is a subsidiary of Verizon Communication and a Mobile Virtual Network Operator (MVNO) that uses the network of the three largest wireless network operators in the United States, including AT&T Mobile, T-Mobile, and Verizon, to offer services.

After the company’s acquisition by Verizon in 2021, TracFone self-identified and reported to the FCC and the Universal Service Administrative Company about instances when it might have violated the FCC’s rule for the Lifeline and the Emergency Broadband Benefit program.

The company has now reached a settlement agreement with compliance measures to resolve the allegations by paying $23.5M for FCC Violations.