Lifeline customers: Beware offers of free cell phones

Friday, April 03, 2015

Based on complaints received by a local non-profit serving Chinese newcomers, dozens of consumers in San Francisco’s Chinatown have been misled into signing up for discounted wireless telephone service over the past six months. The wireless service company, promoting its service on city streets, told passers-by that as long as they have a Medi-Cal card, they could receive a free cell phone and Lifeline-discounted wireless service. Lifeline is a federal and state program that provides discounted telephone service to eligible low-income households.

The wireless company did not inform the consumers that if they already receive Lifeline discounts on a residential (landline) phone, signing up for a second Lifeline-discounted phone service account would cause them to lose their discount on the first one.

Lifeline provides only one discounted phone line per household. 

Those who signed up for the free cell phone in Chinatown received a shock when the Lifeline discount on their home phone was terminated and they were immediately billed for regular, undiscounted residential phone service. Additionally, the free cell phone is a basic phone with very small keys—difficult for many consumers to use—and useful only for calls and texts. If consumers switch back to Lifeline home phone, they must pay a cancellation fee on the wireless service and a conversion fee (from undiscounted service back to Lifeline service) on the landline. For some consumers, the cost of the switch has been as much as $40.

Remember, you can only receive one Lifeline discount, on either a home phone or a cell phone, not both.

For complaints or problems related to California LifeLine, contact the California Public Utilities Commission (CPUC) Consumer Affairs Branch at 800-649-7570. You can also notify the San Francisco District Attorney through the office’s Fraud Hotline at 415-553-9535.

For more information about California Lifeline, see Consumer Action's Connect to California LifeLine and Save.

Consumer Action empowers low- and moderate-income and limited-English-speaking consumers nationwide to financially prosper through education and advocacy.