Free cell phone fraud uncovered

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Updated: 11/05/2012 12:53 pm Published: 11/01/2012 10:17 pm

Just a few simple questions, and cell phone company agents sitting under a tent at 1st and Memorial were ready to give a FOX23 photojournalist a government cell phone without any proof he qualified.

All over town, you'll see tents and trucks set up on street corners - with signs offering nearly free cell phones.

The Federal Communications Commission pays cell phone companies to give phones to people on government assistance. The money comes from fees you pay on your home or cell phone bill.

"It's showing now it's becoming a nightmare," said the Oklahoma Corporation Commission's Jim Jones.

Jones is quick to point out this is not a state program. But the Oklahoma Corporation Commission does give cell phone companies the status to do business in Oklahoma.

And businesses keep showing up - now 27 in all. And this is why:

In 2008, the FCC paid cell phone companies in Oklahoma $63 million through the Lifeline program.

Since then, it's sky-rocketed. This year they're on pace to receive more than three times that.

And more customers are signing up - more than two and half times what it was just four years ago.

Right now more than one out of 10 Oklahomans has a government-paid cell phone.

But how many of these users really qualify?

"We've had customers call in wondering how people are getting free phones, and I'm having to pay and support this thing," Jones said.

And if suspicions of fraud, abuse and waste aren't enough, FOX23 discovered something even worse - criminals using the free phones to commit crimes.

FOX23 agreed to hide his identity. But a drug dealer who just got arrested for dealing admits he was using a government cell phone to do it.

"That's exactly why I got it... to sell drugs... It's easy, very easy," he said.

Tulsa police say whether it's for gang activity, drug deals, or murders, some criminals are using government cell phones to help them do it.

"In the last six to nine months we've seen an explosion in cell phones," said Tulsa Police Department Homicide Detective Jason White.

"I went to one of those tents... and gave them a fake social, fake name, and fake last name, and it worked," the drug dealer said.

He says most criminals are doing the same thing.

"I do know people with several, several phones... I can get in the car right now and go to different tents and get one at every one," he said. "It seems like they don't even care."

It's not just criminals who say it's easy to get a free phone. Even those who qualify say the program's corrupt.

A woman who spoke to FOX23 said she went to a tent and got a nearly free phone through the FCC's Lifeline program. It costs her just $2.57 a month. She qualifies because she receives government assistance.

But the company that gave her the phone - Assist Wireless -- would never know that.

"She didn't ask me to prove it," the woman told FOX23. "I didn't have to show my driver's license. I could've said my name was Sally Brown, and it would've worked... They don't care."

While she waited in line, she said the agents didn't turn down anyone.

"Everybody got a phone that day," she said.

FOX23 went to investigate; a FOX23 photojournalist started asking questions at a tent set up at Admiral and Memorial.

"You work here?" the FOX23 photojournalist asked. "I don't have ID's or anything with me, and I need to get a phone."

"You have to have picture ID and proof of government assistance," the agent responded.

The agent wouldn't budge on the rules but pointed out who would.

"You might try them down there. They might do it," the agent said.

Turns out - he was right.

An agent in a True Wireless tent at 1st and Memorial tells the FOX23 photojournalist about the program.

And then the photojournalist tells him a story about why he doesn't have an ID.

"I got out of my ex's house without my ID's," the photojournalist said.

"Do you get get government assistance?" the agent asked.

"Yeah, my kid gets free lunch," the photojournalist said.

"That works. Want to fill out an app?" the agent said.

Same story at Sheridan and King.

"I don't have my ID," the FOX23 photojournalist said. "Can we do that?"

"Yeah," the agent responded. "We'll work with you."

Of the six businesses FOX23 checked, four were ready to hand over a phone without an ID or proof of government assistance.

"It was as easy as walking up and asking the questions," said the FOX23 photojournalist.

FOX23 went back to get some answers. Most of the timen the agents and their tents were long gone.

At Admiral and Memorial, the same tent was there, the same company, but different people. FOX23 tell the agent there that the Easy Wireless agents there did follow the rules.

But she's quick to point out, others break the rules.

"Yesterday they were set up here and we were there. We'd turn people away, and they'd go to them and walk away with phones," she said.

She said it all comes down to money.

"What's the incentive? They get money for each phone?" asked FOX23's Janna Clark.

"They get a pretty nice commission," she said.

"Without proper identification, how do you know people are who they say they are?" Janna asked.

"You wouldn't," she said.

When we went back to 1st and Memorial, we found the same agents.

"Do you require people to show ID and proof of assistance?" Janna asked.

"Yes," the agent said.

"Do you do that everything single time or just sometimes?" Janna asked.

"They do it every time," the agent said.

"Were you here last Monday?" Janna asked.

"No," she said.

But FOX23's video proves not only was she there, she's well aware of the conversation the FOX23 photojournalist had with the other agent.

No matter how many ways Janna asked both agents denied everything.

FOX23 called their supervisor. He said he's over all the Assist Wireless and True Wireless Agents in Oklahoma. Agents from both those companies offered the FOX23 photojournalist a phone without proof that he qualified. He said other agents might do that.. but not his.

"They have agents out there that are up to no good, and they're giving us a bad name," the supervisor said over the phone. "I've got secret shoppers that watch my team all the time and make sure it's by the book. I can assure you that they are."

"We have it documented on camera they're offering a phone without proof of assistance or ID," Janna said.

"Okay, I would love to see that," he said.

So FOX23 set it up so he could see the video. But once he got to the station, he decided he didn't want to watch it and make a comment about it.

The FCC polices the Lifeline program and made reforms this year to combat fraud.

But Jim Jones with the Oklahoma Corporation Commission says it's not working.

"It's pretty much out of control, and we're trying to reign it back in," Jones said.

"If the FCC isn't going to take any action... we feel like the Oklahoma Corporation Commission should start an investigation," Jones said. "If we don't get a handle on it at this level, who knows what will happen in 5 or 6 years."

The FCC says it's made reforms to prevent this kind of fraud. An FCC representative told Janna he wants to see FOX23's story, so the FCC can do its own investigation.

The FCC says customers who scam the lifeline program may face criminal charges.

They could face fines, go to prison, or may just be kicked out of the program.

In a statement, the FCC said the program has already been over-hauled, and more than 800,000 duplicate phones were eliminated, saving millions of dollars.

The FCC says the program goes through regular audits, and several investigations into companies that provide the phones are underway.

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The views expressed here do not necessarily represent those of KOKI FOX23 - Tulsa

spoken - 5/7/2013 12:51 PM
0 Votes
I feel that true wireless is commiting fraud they just dont want to admit it.Their employees arent even legal citizens.I know of one person who is activating phones at home using addresses of unknown people he drives and gets addresses and gets names of Facebook i confronted him but he continues to do it because he feels its not a problem maybe not for him cause he dont have to pay taxes so true wireless does know exactly what their doing.

cjuarez - 2/11/2013 1:08 AM
0 Votes
its not the phone company's themselves that are fraud its the people giving them out are not doing it legally . the phone company's are legit its the workers that are making it what it is . they are told in the beginning of training YOU MUST GET ALL PROPER ID AND VERIFY THE ASSISTANCE ...if they dont have it then they are not supposed to give out the phones but ignorant workers are doing it illegally because they dont get paid unless they give out a phone . i work for true wireless and have had all the training and its not the company's fault that the workers are scamming people they warn them right off the bat , that they are to do it exactly like it says in the contract , and the workers arent following the rules for a few simple bucks the media needs to tend to the workers not just the companies

twrpd - 11/20/2012 9:55 AM
1 Vote
True Wireless was unfairly targeted in this story, which claims that its agents failed to comply with rules governing the Lifeline program. True Wireless takes compliance with state and federal Lifeline rules very seriously, and has multiple levels of safeguards to ensure the highest levels of compliance. After conducting an internal investigation into the matter, True Wireless has determined that there is no merit to the story, at least with respect to its agents. In fact, the report does not show any actual misconduct by any True Wireless agents, which explains why the television station resorted to misleading editing and commentary by the reporter. True Wireless has sent a letter to the television station demanding a retraction of the story. The full letter may be viewed here:
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