Most of us grew up believing the caution: “There’s no such thing as a free lunch.” In an updated twist, another truism has evolved: There’s no such thing as a free cell phone. Efforts have recently kicked off across the nation to stop a burgeoning horde of scammers set on trying to convince consumers that just such a thing exists and can serve them well.

The scammers particularly target older people, popping up and approaching them in person at bus stops and other gathering spots near senior centers and housing facilities — offering free cell phones and the promise of dependable, inexpensive service allegedly offered through the Lifeline Program.

The seniors who are ensnared are hurriedly handed a shiny, new-looking phone, and directed to sign a paper on the dotted line, often without the opportunity to read it first. The phone turns out to be a useless tangle of wires; the signature obligates them to comply with a contract they didn’t know existed. As repercussions, they’re typically left without phone service connecting them to the world, and sometimes dragged deep into debt.

When It’s Good, It’s Very Good

The Lifeline Program is legitimate and legal, permanently administered by the Universal Service Administrative Company (USAC), and a literal lifeline to many consumers, particularly seniors on fixed incomes. Established in 1985, it subsidizes phone service for many low-income Americans, assuring they can connect to jobs, family, and social and emergency services. The current monthly subsidy is $9.25 per household and each household is limited to one line.

Lifeline was subsequently approved to offer cell phone in addition to landline services.

And in March of 2016, after a highly contentious vote by members of the Federal Communications Commission, the program was expanded to include broadband service for Internet access. This caused a dramatic increase in the number of people participating in the Lifeline Program. From then on — either appreciatively or condemningly, depending on personal politics — the entire Lifeline Program was popularly referred to as “Obama Phones.”

To participate in the Lifeline Program, individuals must either have income at or below 135% of the federal poverty threshold or participate in one of the following assistance programs:

• Medicaid (known as Medi-Cal in California)
• Supplemental Nutrition Assistance Program (SNAP)
• Supplemental Security Income
• Federal Public Housing Assistance
• Bureau of Indian Affairs General Assistance
• Tribally-Administered Temporary Assistance for Needy Families
• Food Distribution Program on Indian Reservations
• Veterans Pension and Survivors Benefit Programs

The FCC established the Lifeline National Eligibility Verifier (National Verifier) which is a centralized online consumer data system that determines whether customers are eligible for Lifeline benefits. The consumer portal is user friendly and available in both English and Spanish, no matter where you live and what service provider you choose. To check current qualifications (application, recertification, and reverification) online, fill out the brief eligibility questionnaire. Upon qualification in the consumer portal,  a list of service providers located in your area will pop up. Consumers may also submit applications through the mail. To check current qualifications online, fill out a brief eligibility questionnaire.

There are Snags ..and Fighting Back

Many of the tactics currently used to enroll people in it are shady, as detailed in a 2022 Los Angeles Times article. Such as free phone service, along with a free phone– sounds like a winner– unless your “new” phone is actually ‘refurbished’  and malfunctioning.   The Lifeline Program currently applies to either landline or cell service — not both — for each individual customer. But by accepting a “free” phone, consumers also unwittingly disrupt any service they have in place. In many cases, for example, once the free cell phone is in hand, customers’ landlines are disconnected, and their monthly bills for service often quadruple from $10 to $40 or worse. These questionable tactics of Lifeline providers to deceive customers during the online application process came under fire in a March 2022 Advisory issued by the FCC Inspector General .

In an independent evaluation of the California LifeLine program by California State University, it found that “The program faces limitations in its goals to serve low-income households and to ensure the effective functions of CPUC. This contributes to a program structure that limits the effectiveness, and responsiveness to customer needs, and enrollment rates.”….. “Feedback expressed that LifeLine is experienced by some as a “second rate program” for “second class citizens.”

“To locate a legitimate Lifeline provider, go to Lifeline Support, or call the Universal Service Administrative Company at (800) 234-9473.

Striving to stamp out fraud in its own front yard, the Federal Communications Commission (FCC) has also set up a specific arm to monitor abuses in the Lifeline Program. Those suspecting a scam are urged to contact the FCC online, and to provide as much detail as possible, including your name and contact information and the company allegedly supplying the Lifeline-supported phone service.

Fighting Back Against the Scammers

One reason the scammers have succeeded so far, according to Shawna Reeves, Director of Elder Abuse Prevention at the Institute on Aging, is that it takes a tremendous amount of time and resources to dig into the documents and the realities underlying the fraudulent transactions. Victims’ compensation programs that have successfully pursued and ended cases of senior abuse typically do not cover property crimes, so are of no service.

Another challenge: Utility companies that agree to be Lifeline providers get a set monthly amount for every consumer enrolled, directly invoicing the government. There is little oversight into the billing and paying processes.

“I’m also concerned because the carriers get a kickback, so they don’t want to pull out of the deals,” Reeves says. “That’s another thing that makes this situation hard to police.” Reeves and others say it’s paramount to urge seniors to report the phone scams they encounter, and to coach them to ask for all documents involved so that they can review them with others in a considered way before making important decisions about buying the goods and services offered.

To locate a legitimate Lifeline provider, go to Lifeline Support, or call the Universal Service Administrative Company at 888-641-8722.

Striving to stamp out fraud in its own front yard, the Federal Communications Commission (FCC) has also set up a specific arm to monitor abuses in the Lifeline Program. Those suspecting a scam are urged to contact the FCC online, and to provide as much detail as possible, including your name and contact information and the company allegedly supplying the Lifeline-supported phone service.

In addition, the FCC operates a Lifeline Fraud Tip Line at 1-855-4LL-TIPS (or 1-855-455-8477).

Finally,  comprehensive investigations take time to conduct and complete. Consumer advocates urge that in addition to contacting the FCC, it is wise to get in touch with the local Adult Protective Services agency for help with potential Lifeline scams.

(This article has been updated July, 2024 since it originally published on May, 2017.)