Just months after the federal government spent $2.2 billion in 2012 to fund a cellular phone subsidy program aimed at giving low-income Americans taxpayer-funded telephone services, tightened FCC rules have revealed that a whopping 41% of those who received “free” phone service could not substantiate eligibility for the program.
The “Lifeline Program” began in 1984 as a way to keep low-income people connected to family and emergency services. The program was intended for those who meet federal poverty standards or currently receive food stamps, Medicaid or other taxpayer-funded handouts.
Until last year, telephone carriers were not required to verify the eligibility of those who applied for the phone subsidy. It is only now, after the FCC tightened their rules and require eligibility verification, that the massive fraud – accounting for nearly half of those subscribed to the handout program – has been revealed to tax paying Americans.
The FCC now requires telephone carriers to verify eligibility and may impose fines of $150,000 per customer, per day for fraudulent use of the Lifeline program. The FCC claims the new safeguards will save taxpayers $2 billion over the course of three years.