Summary: SurgePays, Inc. (NASDAQ: SURG)
The key competitive advantage, according to CEO Kevin Brian Cox, is the company's “proprietary” fintech platform that “empowers clerks at over 8,000 convenience stores to provide a suite of prepaid wireless and financial products to underbanked customers.”2 SurgePays claims this customer acquisition channel will allow SurgePays Wireless to scale nationwide and provide signup, verification, and approval for the ACP. In contrast, competitors depend entirely on setting up outdoor tents in low-income neighborhoods.
Part 1: Red Flags in Cox’s Background
In the legal proceedings, AATAC claimed that SurgePay’s phones were defective and ultimately recalled. Because SurgePays delivered “unmerchantable” products, SurgePays was forced to remove all phones from AATAC stores, and the test ended.
As a part of this investigation by the GAO, they made recommendations to prevent fraud within the ACP further. The suggestions are primarily around increasing rules and regulations to prevent fraud. These recommendations are similar to what they implemented with the Lifeline program.