MVNO Total Call Mobile will pay a $30 million fine and permanently lose its ability to participate in the Lifeline program to resolve a fraud case opened by the FCC earlier this year.
FCC officials said the settlement comes as the result of an investigation by the FCC Enforcement Bureau and U.S. Attorney’s Office in the Southern District of New York into reports that the carrier illegally enrolled “tens of thousands” of duplicate and ineligible customers into the Lifeline program. Launched in 1985, the Lifeline program provides subsidies totaling $9.25 per month per customer to carriers that help low-income individuals connect via discount communications services.
The FCC said Total Mobile admitted to “fraudulent practices,” including enrolling ineligible subscribers using fake and repeated eligibility cards and fake subscriber information. The carrier also admitted managers at Total Mobile did not take corrective action when reports of the fraudulent activities first surfaced and the company itself “failed to implement effective policies and procedures to ensure eligibility of Lifeline subscribers and monitor compliance.”
In addition to the $30 million fine that will go toward repaying the Universal Service Fund and the U.S. Treasury, Total Call Mobile will have its Lifeline participation privileges permanently revoked, FCC officials said.
“We have no toleration for fraud,” FCC Enforcement Bureau Chief Travis LeBlanc said in a statement. “This unprecedented $30 million settlement along with a permanent ban from the Lifeline program affirms our commitment to pursue the strongest sanctions for those who defraud or abuse the Universal Service program. We thank our partners at the Department of Justice for working with us to make sure that companies that commit fraud are held accountable to the fullest extent of the law.”
On its website, Total Call said it will provide service through Dec. 24 and noted it has partnered with enTouch Wireless to transfer the Lifeline benefits of eligible customers.
Though he released no official comment, the news is likely particularly pleasing to FCC Commissioner Ajit Pai, who has been railed against waste, fraud, and abuse in the Lifeline program and previously called the trends seen in the Total Call case “disturbing.” Pai, who is one of several candidates reportedly in the running to take over for current FCC Chairman Tom Wheeler following his departure in January, earlier this year launched an investigation into the failures of the Lifeline program in order to prevent continued abuse.
Filed Under: Industry regulations