The NAL concludes that Total Call engaged in “egregious” widespread misconduct that included not only third-party sales agents, but also Total Call employees (supervisors and management).The NAL Allegations The conduct alleged by the NAL includes the following:
- Enrollment of Duplicate Consumers. The NAL alleges that Total Call intentionally enrolled thousands of duplicate Lifeline consumers. Specifically, either one sales agent or multiple agents “would enroll a consumer more than once, making slight changes to the consumer’s identifying information.” In order to enroll duplicate subscribers, the NAL alleges Total Call sales agents would routinely override the third-party identification system in the National Lifeline Accountability Database (“NLAD”). The NAL asserts that in the fourth quarter of 2014, 99.8 percent of Total Call’s enrollments were the result of an override. (The NAL does not discuss why the NLAD failed to detect this pattern.) The NAL states that the investigation uncovered evidence that some duplicates were the result of an agent creating a phantom customer using a stolen identity.
- Enrollment of Ineligible Consumers. The NAL alleges the “widespread misuse of eligibility documents that resulted in the enrollment of ineligible consumers in Lifeline by Total Call at the behest of high-level managers working for Total Call master agents.” The NAL alleges that ineligible consumers typically were enrolled using temporary Supplemental Nutrition Assistance Program (“SNAP”) cards, which do not contain names. The investigation found evidence that Total Call employees made Total Call management aware of these practices. Moreover, an undercover FCC employee with no identification or eligibility document apparently was able to secure a Lifeline phone from a Total Call agent who “possessed extra SNAPs that could be used as the requisite eligibility documentation.”
- Failure to Ensure Certifications. The investigation found that it was common for Total Call’s sales agents to sign the required consumer certification instead of the applicant.
- Failure to Train Employees. The NAL alleges that multiple agents interviewed by the Bureau never received training from Total Call, in apparent violation of the company’s approved Compliance Plan.
- Inflated and Revised FCC Form 497s. The NAL found that Total Call submitted hundreds of Form 497s with inflated subscriber counts and hundreds of revised form 497s after it was notified by USAC that it had identified more than 32,000 alleged intra-company duplicate subscribers. Many Form 497s were revised multiple times. Ultimately, the NAL finds “Total Call consistently failed to remove improper enrollments from its Form 497 reimbursement requests.”
- Delayed, Incomplete Responses to Subpoenas. One perplexing aspect of the NAL is its finding of fault for Total Call’s failure to provide documents in response to the Commission’s subpoena for “eligibility documentation for the Company’s new Lifeline consumers.” Even if Total Call did indeed have copies of “select eligibility documents” as alleged, at the time of the request, FCC Rule 54.410(c) – which was recently amended – prohibited the retention of the demanded documents.
- Widespread Misconduct. The NAL asserts that USAC found over 32,000 intra-company duplicate subscribers enrolled by more than 800 sales agents in 13 states. (Note, however, that USAC refuses to publicly divulge the parameters it uses to identify an alleged intra-company duplicate.)
- Total Call Employee Involvement. The NAL asserts that Total Call employees were actively involved in the misconduct. For example, “Total Call employees who staffed the Total Call sales agent help line assisted sales agents in ‘pushing through’ the enrollment through the use of an override function which the Total Call helpline employees could remotely activate.”
- Total Call Management Awareness. The NAL asserts that Total Call management was made aware of the misconduct, stating, for example: “Disturbingly, Total Call employees repeatedly and explicitly told Total Call management that the manner in which certain Total Call sales agents were enrolling ineligible consumers constituted fraud. Despite these warnings, Total Call proceeded to request and receive reimbursement from the [USF] for these ineligible consumers that were specifically identified by Total Call employees.”
USAC discovered the intra-company duplicates in November 2014 and even though our investigation was concluded by mid-2015, [FCC Chairman Wheeler’s] office kept the [NAL] on hold until March 2016 – long after the one-year statute of limitations had passed for most of those apparent violations. Even then, Commissioners were told that the [NAL] could not be released or publicly discussed until April 1, 2016, conveniently one day after the Commission was scheduled to expand the Lifeline program to broadband.Next Steps Total Call has 30 days from April 7 to respond to the NAL. We will keep you apprised of further developments.