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Whoops. Government Gives Free Cell Phones to Wrong People, Costing Tax Payers

KANSAS CITY, Mo. — Fraud in a government-run cell phone program may be costing taxpayers more than $33 million.

Last year the federal program called Lifeline paid $1.6 billion to cover free phones and the monthly bills of more than 12 million low-income subscribers.

But because of what Senator Claire McCaskill calls poor oversight, the phones may be going to people who don’t qualify, and to hundreds of thousands of people who do qualify, but have more than one phone.

Once homeless, Felicita SanMiguel says her cell phone was her lifeline while trying to find a job and raise three kids.

“When you’re in a homeless shelter, you have to leave in the morning so, you’re gone all day long,” she said. “So there’s no way, if they were calling the shelter, there’s no way for you to know until that evening when you got home. [And] you can’t call a job back at 6 or 7 in the evening.”

Just one of many people who could have benefited from Lifeline, a program that covers cell phone bills to people in need.

“To have a cell phone, to be able to take care of business or talk to loved ones or schools or anything would be a blessing to anyone,” SanMiguel said.

But SanMiguel didn’t have access to the program. Instead, according to Senator McCaskill, many people who didn’t qualify were getting the phones, sometimes more than one.

And who’s footing that bill? As of 1996, all phone companies must pay into the fund that supports this service. Many companies pass that contribution on to you, the consumer, by tacking on a fee to each of their customers’ bills.

In response to questions raised by McCaskill, the FCC proposed changes to the Lifeline program that included a database to better track subscribers and fraud. The FCC also said that after eliminating nearly 270,000 of the duplicate subscriptions, the program has already saved $33 million.

McCaskill says with better oversight, the program can help people who actually need it.  People like SanMiguel.

“That’s a lot of people that could have been helped,” McCaskill said. “A lot of other families.”

Senator McCaskill became aware of this program when she received an invitation to apply for the government subsidized cell phone in the mail. She says she’s not eligible.

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