News 4 Investigates: Daily Briefing

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News 4 investigation spurs major changes in free cell phone program

by Chris Nagus

Posted on January 11, 2012 at 4:28 PM

Updated Wednesday, Jan 11 at 5:59 PM

(News 4 Investigates) -- Each time you pay your cell phone bill there's a fee to provide free cell phones to people in need.

The government funded Lifeline program started with good intentions, but as a News 4 investigation revealed, it's a program riddled with fraud and abuse.
In December, News 4 uncovered major problems with the way the phones are distributed on street corners around St. Louis.
The investigation by Chris Nagus started months earlier when he learned government funded phones were showing up in the mailboxes of St. Louis residents who didn't even want a phone.
Even U.S. Senator Claire McCaskill of Missouri got an offer for one of these free phones.
The Senator credits Chris Nagus’ investigations for shining a light on this problem - and today we learned big time reform is coming.
Sen. McCaskill asked the Federal Communications Commission to crack down, and put controls in place to prevent fraud.
Today, she provided a detailed list of changes recommended by the chairman of the FCC.
They include a central database that tracks users to prevent one person from signing up for more than one free phone, an audit of the program every two years and a budget.
Sen. McCaskill says the program still needs close scrutiny, and although these changes are good, fraud is still a huge concern.
"I still think we need to stay on top of this, because when a company can make money off the government by distributing these free products, taxpayers will end up holding the bag" said Sen. McCaskill.
This program will not be eliminated, Sen. McCaskill still feels like the Lifeline Program establishes vital communication for the poor.

These changes are expected to save upwards of $2 billion over several years