Tracfone failed to properly review applications and investigate reports that ineligible consumers were enrolled in the program. The telecommunications carrier eventually found the glitch in August 2015 and repaid over $10.9 million to Lifeline. That amount was credited as part of the $13.4 million settlement.
Congress created Lifeline under the Telecommunications Act of 1996. Its primary objective is to help low-income consumers with their telecommunications needs including a free cellphone (provided by the carrier) and a free monthly cellphone service (provided by the government. To qualify for the program, a consumer’s income must be at or below 135% of the Federal Poverty Guidelines or a consumer must be a recipient of certain specified federal assistance programs.
“Today’s settlement demonstrates our commitment to ensure that those participating in government-funded programs exercise appropriate vigilance to prevent the misuse of taxpayer dollars,” said Deputy Assistant Attorney General Michael Granston of the DOJ Civil Division’s Commercial Litigation Branch.
