Okay…you’ve heard of tax refund fraud, food stamp fraud and unemployment fraud, but what do you know about phone subsidy fraud? Put simply: it exists and if you’re a wireless subscriber, you’re paying for it; but now the Federal Communications Commission (FCC) is taking steps to prevent it.
FierceWireless.com recently reported that the FCC “voted to reform its Lifeline phone subsidy program and stamp out waste and fraud by limiting people in the program from claiming subsidized handsets from multiple wireless carriers.” The Lifeline program provides a subsidy of up to $10 a month to carriers per subscriber. Subscriber eligibility is determined by state requirements but often includes individuals who qualify for other social services benefits, such as the Supplemental Nutrition Assistance Program (SNAP), Section 8 public housing benefits and Temporary Assistance for Needy Families (TANF).
The fraud occurs when individuals apply for subsidies through multiple carriers. The FCC undertook a review of 3.6 million subscribers records in 2011 and estimates that it “eliminated nearly 270,000 duplicate subscriptions in 12 states,” saving $33 million. Until now, the carriers were limited in their visibility into the subscriber-base. The FCC’s reform efforts include creating a new National Lifeline Accountability Database that enables the carriers to see where duplicate accounts exist. (Checking for fraud…what a great idea!) The FCC also limited the number of subsidies per household to one. However, the article notes that “it defined a household as an ‘economic unit’ so that separate low-income families living at the same address can get service. (Economic unit?? You mean subsidized phones for all!)
The FCC is stepping up to the plate to help prevent fraud, but this is just the beginning. The commission should leverage public records technology and data analytics to identify the fraudsters before they provide the subsidy to the carriers. That way, the program will still be there when someone really needs a lifeline.