Federal program for phone, internet riddled with fraud

$137 million a year goes to ineligible or dead people

A federal program designed to help millions of low-income Americans afford phone and internet service is riddled with fraud and abuse, with at least $137 million a year goingtoineligible,fakeordead people,accordingtogovernment auditors.

The explosive report Thursday from the Government Accountability Office shows that despite efforts to rein in abuse of the sprawlingLifelineprogram, which serves 12.3 million subscribers on Medicaid, food stamps or other benefits, many recipients of the $9.25-a-month credit are violating program rules.

Bipartisan criticism

Established during the Reagan administration, Lifeline is aimed at closing the digital divide between those with access to vital communications services and those without. Altogether, Lifeline distributes about $1.5 billion a year in subsidies.

It is funded by fees that are added to every consumer’s monthly phone bill and was expanded in 2016 — allowing beneficiaries to spend their monthly credits not only on traditional landline phone service, as they have done for decades, but also on residential internet and mobile broadband.

For years, however, Lifeline has come under bipartisan criticism over its handling of benefits. Thursday’s report, commissioned by Sen. Claire McCaskill, D-Mo., appears to underscorethoseproblems. GAO’s study of 46 states and the District of Columbia found that 1.2 million subscribers could not be confirmed as being eligible for Lifeline benefits — out of 3.5 million accounts analyzed by the agency. It is unclear how many ineligible subscribers may be in the remaining pool of 8.9 million subscribers GAO did not study.

Some ‘big’ problems

By analyzing Lifeline’s database and also matching it against Social Security Administration records, GAO found 5,500 duplicate beneficiaries, as well as 5,400whohadactuallybeen dead for more than a year.

When government auditors posed as Lifeline applicants, approaching as many as 19 telecom carriers with false personal information, a dozen of the requests were approved, indicating that the companies — who are responsible for verifying a potential customer’s eligibility — were not reliably screening out fraudulent applicants.

The FCC has called for the creation of a national third-party verifier to relieve phone companies of that obligation.

Despite the program’s flaws, many Americans who are eligible for Lifeline are not signed up for it, according to federal statistics.

“A big problem with Lifeline is how relatively few eligible people actually take advantage of it,” said Brent Skorup, a research fellow at George Mason University’s Mercatus Center.