TracFone, now a Verizon subsidiary, has agreed to compliance measures and a $17,487,000 civil penalty in addition to $6,013,000 to resolve a 2020 Notice of Apparent Liability for other apparent Lifeline violations, the FCC announced. TracFone had self-identified and reported to the regulator and the Universal Service Administrative Company certain instances in which it may have violated the Lifeline and/or EBB rules shortly after the company’s acquisition by Verizon.
The FCC’s Enforcement Bureau investigated TracFone’s procedures for determining customer usage. The company disclosed that its internal processes resulted in Lifeline claims for customers who had not used the service in the prior 30 days, contrary to FCC rules. TracFone’s internal systems improperly considered a subscriber’s receipt of an inbound text message to constitute qualifying Lifeline usage; and improperly claimed support for a group of customers who were enrolled jointly in both the Lifeline and EBB programs, but did not use one of the services in the prior 30-day period, according to the complaint.
Verizon acquired TracFone two years ago.
“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,” Loyaan A. Egal, FCC enforcement bureau chief, said in a prepared statement. “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.”
