FCC: TracFone Made Up 'Fictitious' Customers To Defraud Low-Income Program (arstechnica.com) 43
TracFone Wireless is facing a potential $6 million fine for allegedly defrauding a government program that provides discount telecom service to poor people. Ars Technica: The Federal Communications Commission proposed the fine against TracFone yesterday, saying the prepaid wireless provider obtained FCC Lifeline funding by "enroll[ing] fictitious subscriber accounts." TracFone improperly sought and received more than $1 million from Lifeline, the FCC said. The FCC press release said:
"TracFone's sales agents -- who were apparently compensated via commissions for new enrollments -- apparently manipulated the eligibility information of existing subscribers to create and enroll fictitious subscriber accounts. For example, TracFone claimed support for seven customers in Florida at different addresses using the same name, all seven of whom had birth dates in July 1978 and shared the same last four Social Security Number digits. The Enforcement Bureau's investigation also found that, in 2018, TracFone apparently sought reimbursement for thousands of ineligible subscribers in Texas. Today's proposed fine is based on the 5,738 apparently improper claims for funding that TracFone made in June 2018 and includes an upward adjustment in light of the company's egregious conduct in Florida." TracFone said it would respond "at the appropriate time" in an effort to reduce or eliminate the proposed fine. The company also said "we take seriously our stewardship of public dollars and will continue to focus on connecting millions of low-income customers to school, jobs, healthcare, and essential social services," according to Reuters.
"TracFone's sales agents -- who were apparently compensated via commissions for new enrollments -- apparently manipulated the eligibility information of existing subscribers to create and enroll fictitious subscriber accounts. For example, TracFone claimed support for seven customers in Florida at different addresses using the same name, all seven of whom had birth dates in July 1978 and shared the same last four Social Security Number digits. The Enforcement Bureau's investigation also found that, in 2018, TracFone apparently sought reimbursement for thousands of ineligible subscribers in Texas. Today's proposed fine is based on the 5,738 apparently improper claims for funding that TracFone made in June 2018 and includes an upward adjustment in light of the company's egregious conduct in Florida." TracFone said it would respond "at the appropriate time" in an effort to reduce or eliminate the proposed fine. The company also said "we take seriously our stewardship of public dollars and will continue to focus on connecting millions of low-income customers to school, jobs, healthcare, and essential social services," according to Reuters.
TracFone Sales Agents (Score:5, Funny)
Did TracFone hire all the ex-Wells Fargo bank employees?
Re:TracFone Sales Agents (Score:5, Insightful)
Everyone in any job that imposes quotas that are for whatever reason unreachable knows the following math: Be honest and certainly lose your job, or be dishonest and maybe lose your job. It's endemic across every sales related industry, and the only reason it doesn't get talked about more is because fake rewards card signups aren't really news worthy.
Not bad student, bad principal.
Re:TracFone Sales Agents (Score:4, Insightful)
Too bad that it probably cannot be proven that TracFone management knew about the fake customers. Otherwise, some very deserving persons might be looking at jail time.
Another smelly aspect is that there is apperantly no verification of who is actually a customer. That is almost an invitation to fraud.
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Management? Nah, being promoted to the executive suites is pretty much 'Get out of jail free' card now, jail and fines are only for line personnel.
CEOs do go to jail (Score:2)
Bernard Ebbers [nytimes.com] would've disagreed.
And he was not alone [cbsnews.com], so shove your America-hating bullshit...
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Well, they ripped off rich people, which of course isn't allowed.
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Not just sales, either. I remember doing telephone tech support where bonuses were granted on number of calls resolved, and the supposed "best performer" was an utter moron who gave consumers the same advice almost every time. "Type in 'FDISK' and press enter. Now 'Format C: /u and press enter again. No, it won't hurt anything. When it's done reinstall." Not only did he get bonuses almost every month but when I ran into him a few months after I had left the company he had been promoted to shift superv
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Perhaps he realized sooner than everyone else that the only way to "fix" Windows is to nuke it and reinstall.
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This was support for Win95, and the majority of the calls were from people who hadn't read the Hardware Compatibility List. Nuke and reinstall would fail, and then I'd get them when they called back. One poor lady lost five years of financial data, and another guy lost the textbook he was 2/3 finished writing because people just didn't know what the commands he was spelling to them did.
Re: TracFone Sales Agents (Score:2)
Yes, I agree that was a shit thing to do. I was trying to be funny... But really not so funny.
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No, their sales force didn't nearly require the training that banker's employees did. I'd imagine that the enrollments weren't even made by "employees". I bet that there's third parties who are contracted, who contract 100% commissioned "sales reps" who are supplied with cases of remaned or outdated phones, a folding table, signage and transportation to the nearest assistance office or low income areas with good foot traffic and set them free instructing them how to "verify" and "qualify" prospects and how
just company gets fine? (Score:4, Insightful)
Management did this scam and stole money, why are they not arrested and put in prison?
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Sounds more like some salesman who work on commission did it, for the commission.
Either way, it is criminal behavior. Of course, the company should be fined. In addition, any identifiable individuals who knowingly participated in this scam at taxpayer expense should be criminally prosecuted.
Who says? Who can prove it? (Score:2)
Some sales people out in bogus customers and got their commission dishonestly. Or a local manager did it. Or ... somebody did.
If we can prove which individuals did it, we can prosecute those individuals. Until then, we can fine the company, because whoever did it was part of the company.
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So the question becomes, were the management and sales people hauled down to the police station and then questioned. And, were any subsequent arrests made?
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This is the whole fundamental problem with corporatism. Corporations are explicitly vehicles for separating profit from responsibility. Once upon a time you had to justify founding a corporation by appealing to the public interest. Today you only have to pay a fee.
Some would say the fundamental benefit (Score:2)
If it were a group of people working together WITHOUT formal corporation, you're left with exactly the same problem of trying to figure out who did wrong, and prove it.
Plus the problem that you can't very well sue individual salesmen for $30 million if they're ripping of customers.
Because the law recognizes that they are working together as a business, you can sue the business or punish the business, the corporation. You don't HAVE to figure out which employees has which degree of wrongdoing.
If Ford sells
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But this is a different thing, this would be like a car manufacturers' execs conspiring together to cut out proper gasoline tank construction and materials for something cheap so the things go up in a fireball in low speed rear endings. Those execs should be prosecuted. Fining company is slap on wrist
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Do you have some evidence that any executives conspired at all, vs salespeople cheating for easy commissions? If there is evidence, they can be prosecuted. If there is not evidence of who all did wrong, and what they did, the company can be punished.
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Engage your brain. Obvious ways to tell if customer is fictitious or not, there are executives responsible for such means.
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Because that's how it works. The major land line telcos have stolen billions and billions of dollars that we gave them, not as part of our bills but in addition to that through government grants, to build out the last mile and bring internet access to all. Their CEOs aren't going to prison either. They gave the money out as executive bonuses and stock dividends and we are left with third world internet access in rural areas.
"reduce or eliminate the proposed fine" (Score:4, Interesting)
TracFone said it would respond "at the appropriate time" in an effort to reduce or eliminate the proposed fine.
.... and just for trying that one, the fine should be tripled.
Re:"reduce or eliminate the proposed fine" (Score:4, Informative)
.... and just for trying that one, the fine should be tripled.
You will need to repeal the 1st Amendment to the United States Constitution before you can so that. Here's the text, with the relevant clause in bold:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
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They can say what they like and everyone has the right to petition the King. The problem with free speech is the wealthy can use it to infringe on the privacy, due process and reputation of others.
If their petition (appeal) carries more weight with the King (court), then the people should demand politicians fix that. At the very least, a punishment for appeals lacking substantial grounds (that is, vexatious complaints), should exist.
This corporation is demanding it isn't fined for the misbehaviour of
So no more courts, no more hearings. Cops just pun (Score:2)
So you're thinking it would be best if the cops just punish you however and whenever they want. No opportunity for you to respond to the charges.
You'd like to do away with the 6th amendment, the 8th, the 5th and the 1st. I see.
Given that that you'd prefer to live in a place that doesn't have most of the bill of rights, since you want to get rid of at least half of it, you might prefer to live somewhere other than the United States. You should look into it. If you want to be somewhere where the cops just t
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defrauding the government (Score:1)
You know where I, a private citizen, go if I defraud the government? Fucking prison.
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Fucking prison
Sounds even better than tennis prison.
As for the company employees, they still ought to go to jail, if there's proof of their direct involvement. There's the problem: often it's hard to prove who exactly is responsible. Did the employee act on his own, or did the manager tell him to, or was there a (secret) policy? The other problem is that very often no effort whatsoever is made to establish these facts, once the fine has been issued. It should be both, really.
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Fucking prison
Sounds even better than tennis prison.
"Death! Death by Snu Snu!"
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Or an official policy that unofficially produces these results. Like Wells Fargo setting a quota of eight accounts per customer - they didn't order their employees to fraudulently sign people up for accounts, just created a situation where they had to do so if they wanted to keep their jobs.
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I'm going to leave this packet of drugs in a hidden place. You leave some money in a different hidden place. No crime committed right?
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Apology from TracFone (Score:1)