Six Consumer, Veteran, Farm Groups Tell FCC: Reduce Fraud By Ending Same-day Distribution Of Lifeline Cell Phones

WASHINGTON, June 19, 2013 /PRNewswire-USNewswire/ -- Six groups representing consumers, veterans and rural Americans have filed letters with the Federal Communications Commission (FCC) urging the federal agency to further restrict potential abuse of the wireless Lifeline phone subsidy program by barring the practice of same-day distribution of such phones.

Available online at http://apps.fcc.gov/ecfs/document/view?id=7520920304, one letter was filed by five groups:  Community Action Partnership (CAP), Consumer Action (CA), Maryland CASH (Creating Assets, Savings and Hope) Campaign, the National Association of American Veterans (NAAV), and the National Consumers League (NCL). Available online at http://apps.fcc.gov/ecfs/document/view?id=7520920351, the second letter was filed by the National Grange.

The CAP-CA-Maryland CASH-NAAV-NCL letter states: 

"… we are writing to reiterate our strong support for the wireless Lifeline program, and to applaud the Commission's efforts to rein in waste, fraud and abuse in the system. Specifically, we support the reforms enacted in early 2012, including:

• The creation of a National Lifeline Accountability Database to prevent multiple carriers from receiving support for the same subscriber;
• Requiring providers to de-enroll Lifeline subscribers who have not used the service for a consecutive 60-day period; and
• Requiring providers to verify annually the initial and continued eligibility of their lifeline subscribers.

While these changes have shown success in reducing fraud rates, problems with the program persist. To ensure the continued success of the Lifeline program, more reforms are in order. It is for this reason that we applaud the Commission's Public Notice soliciting comments on TracFone's recent petition to 'promptly commence a rulemaking proceeding to amend the rules governing the Lifeline program to prohibit in-person distribution of handsets to prospective Lifeline consumers.'

In its filing, TracFone recommends that the FCC should require eligible telecommunications carriers (ETCs) to provide handsets to the Lifeline subscribers via the U.S. mail or an approved delivery service only after the ETC has verified the applicants' eligibility in accordance with the Commission's rules. TracFone, in its filing, stresses that while it does not provide in-person phone distribution, it is still able to successfully administer the Lifeline service.

Commenters agree with TracFone's statement that 'Prohibiting in-person wireless Lifeline handset distribution would materially reduce the incidence of fraudulent enrollment caused by unscrupulous providers or overzealous agents enrolling customers in Lifeline programs without properly verifying customer eligibility.' This step would both prevent and detect abuses while ensuring that wireless Lifeline-supported service remains available for those who qualify.

Lifeline provides vital telecommunications access to seniors, veterans and low-income Americans in every state, territory and commonwealth. We applaud the Commission's anti-fraud efforts and efforts to continue to help connect all Americans to vital telecommunications services."

The second letter from the National Grange reads in part:

"I am writing on behalf of the National Grange and our members to support the petition of TracFone to 'promptly commence a rulemaking proceeding for the purpose of amending its Lifeline rules to prohibit in-person distribution of handsets to prospective Lifeline consumers as a means to prevent waste, fraud, and abuse in the Lifeline program.'

The National Grange has been a long-time advocate of Universal Service, recognizing the value and need for telecommunications services. We filed support for the expansion to Wireless Lifeline, in light of the fact that society has steadily been moving away from landline phones in favor of wireless technology. Wireless Lifeline is especially important for low income Americans who move often for employment opportunities, migrant workers, and transient families.

According to the FCC and the carrier statistics, about 75 percent of all participants in the Lifeline program choose wireless service over a landline service. In fact, according to a 2012 study from the National Center for Health Statistics, more than a third of all U.S. households are 'landline free' and rely strictly on wireless telephones, and that number continues to grow. The rest of Americans benefit from mobile engagement and staying in contact no matter their location; low-income consumers should be no different.

We have also whole-heartedly supported your efforts to reduce fraud and waste in the Wireless Lifeline program. We applaud your efforts, which have led to significant savings. In keeping with our concern about fraud, we also support TracFone in their filing asking for an end to in-person distribution of handsets.  We believe that the Commission should require ETCs to send handsets to the Lifeline subscribers via U.S. mail or approved delivery service after the ETC has verified the applicants' eligibility in accordance with Commission rules.

We hope you continue to focus on common sense and already effective reforms, while preserving the benefits of the program and fulfilling the mandate of affordable telecommunications access for all Americans. Thank you for your work. Please feel free to contact me with any questions or concerns."

ABOUT THE GROUPS

Community Action Partnership is the nonprofit, national membership organization representing the interests of the 1,100 Community Action Agencies (CAAs) across the country that annually help 18 million low-income Americans achieve economic security. The 1,100 Community Action Agencies cover 99 percent of America's counties.

Founded in 1971, Consumer Action is a national non-profit education and advocacy organization serving more than 8,000 community-based organizations with training, educational modules, and multi-lingual consumer publications. Visit http://www.consumer-action.org for more information.

The National Grange, founded in 1867, is a nonprofit, nonpartisan, fraternal organization that advocates for rural America and agriculture. With a strong history in grassroots activism, family values and community service, the Grange is part of more than 2,100 hometowns across the United States. http://www.nationalgrange.org.

Maryland CASH (Creating Assets, Savings and Hope) Campaign is a network of organizations from across Maryland that seeks to improve the financial stability of working families.  The Maryland CASH Campaign advocates on behalf of low-and moderate-income taxpayers throughout the state, as well as providing financial education programs and free tax preparation sites. http://www.mdcash.org. 

The National Association of American Veterans, Inc. is a 501(c)(3) nonprofit organization incorporated in November 2005 to be a provider of health care information, emergency assistance and advocacy, counseling, housing coordination, and educational programs for all service members, with an emphasis on the severely wounded and single parent service members, military caregivers, veterans, and their families at risk of not returning to normalcy after serving in a war, and residing in underserved areas nationwide. http://www.naavets.org.  

The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit http://www.nclnet.org.

SOURCE Community Action Partnership, Consumer Action, The National Grange, Maryland CASH, The National Association of American Veterans, and The National Consumers League