9 Investigates: Some question cost of free phone program

by: Mark Becker Updated:

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CHARLOTTE, N.C. —

If you’re cringing over your latest cellphone bill, you may be surprised to hear that companies are handing out thousands of phones for free, and you're helping to pay for them.

It's a program that some say is out of control.

The federal government program was started in the 1990s  to make sure that everyone has access to a phone for emergencies. Eyewitness News had no trouble finding people using them in Charlotte.

 “Do you have a Safelink phone?” Eyewitness News reporter Mark Becker asked.

“I do,” Sara Shuler said.

“What do you have to do to get that?” Becker asked another woman.

“You just present your Medicaid card, your food stamp card, either or and your ID, and they give you 250 minutes free every month,” Laurie Drye said.

“So who's paying for that?” Eyewitness News asked.

“Obama. We call them Obama phones,” Drye said.

That may be the word on the street, but the truth is, everyone with a cellphone is paying for those phones. It's there in the fine print of your bill -- the Federal Universal Service Charge.

The rules clearly set limits of one free phone per household, but that's not what Eyewitness News found.

“You've got how many phones?” Becker asked.

“Two,” Shuler said.

“You need both?” Becker asked.

“Yes,” she said.

“Why?” Becker asked.

“Because this one's my backup,” Shuler said.

Johnsie McDaniel has four.

“Four? Why do you need four?” Becker asked.

“Well I lost two, so I got three more at home, and lost two,” McDaniel said.

“You're only supposed to have one,” Becker said.

“Right. But if you call them and tell them you lost one, they will send you another,” McDaniel said.

“No questions asked?” Becker said.

“No questions asked,” McDaniel said.

But some are questioning how much the phones are costing taxpayers. The FCC said last year it was $2.1 billion and, if nothing changes, it could reach $3.3 billion by 2014.

Eyewitness News found three companies handing them out in Charlotte -- Assurance and Safelink by mail order and Access Wireless, which set up in a check cashing place on Beatties Ford Road.

Eyewitness News went there to ask some questions.

“I talked to a lady who had four free phones,” Becker said.

“Four? Well, they're all different companies. So if someone had an Assurance phone, they could get this phone because sometimes the Assurance phone can cut off or get terminated,” said Ciara Sanders with Access Wireless.

Sanders said they make sure they don't hand out two of their own phones to the same person.

“But how does your company make sure that you're not duplicating and giving someone two phones?” Becker asked.

“Well that's the thing -- it's a different company, so they wouldn't know,” Sanders said.

Eyewitness News showed what we found to Congresswoman Virginia Foxx from Boone. She's co-sponsoring a bill that would limit the program to land lines.

“Anytime you put out anything that is free, it's going to be abused,” she said. “The phone companies should be held accountable and the individuals getting these should be held accountable.”

The bill is in a House committee, and Foxx is confident it will pass.

In the meantime, the companies are still handing out those phones, and you're still paying the bill.

For more information about the program, click here.