Increased theft of Supplemental Nutrition Assistance Program (SNAP) benefits has effects that extend beyond the theft victims themselves. The costs of the government’s efforts to solve the issue ultimately fall on all taxpayers.
According to Cal Matters, SNAP theft in California alone costs the state tens of millions of dollars per year in replacement benefits. In response, the state has suggested upgrading SNAP security features in the budget for the following year for a $50 million cost.
The food purchasing assistance program SNAP, formerly known as food stamps, is managed at the state level by the U.S. Department of Agriculture. Each month, SNAP beneficiaries have money put onto their Electronic Benefits Transfer (EBT) cards; these cards are a major factor in the growth in fraud.
EBT cards are made to function like debit cards, as previously reported by GOBankingRates. They lack the same built-in security features found on bank-issued debit or credit cards, which is a problem.
A large portion of fraud involves “skimming,” in which criminals use a tool to steal the card number and PIN from an electronic benefits payment card belonging to someone else. For the organizations that manage SNAP and the taxpayers who pay for them, this is a very expensive problem.
According to a survey published last fall by the consumer reporting company LexisNexis Risk Solutions, SNAP agencies incur a loss of $3.72 for every $1 in benefits lost due to fraud. Additional expenses for internal labor and administrative duties are included in this sum.
For organizations that accept more applications through web and mobile platforms, the cost of fraud is much higher. According to LexisNexis Risk Solutions, agencies that receive more than 20% of their submissions through mobile channels experience an average loss of $4.40 for every $1 in benefits that are fraudulently obtained.
The financial burden is shared by all taxpayers, whether or not they are SNAP-eligible, as these organizations are funded by tax dollars.
Food stamp fraud and theft are now so prevalent that some SNAP beneficiaries want to hold the government legally accountable when benefits are taken.
The Massachusetts Department of Transitional Assistance, the organization in charge of SNAP in the state, was recently the target of a class-action lawsuit because it refused to compensate fraud victims for benefits that were fraudulently obtained.
Skimming occurs all around the nation, according to MLRI lawyer Betsy Gwin, who spoke to CBS News. The absence of federal protections for EBT users is the difference that we can observe.
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The state of California reimburses SNAP fraud victims, and there are a lot more of them now than there were a few years ago.
According to data cited by Cal Matters, the rate of EBT theft in the Golden State has nearly doubled since 2019. Theft frequently happens shortly after benefits are transferred to EBT cards, but a reimbursement to recipients may take several weeks.
The USDA advises getting in touch with your neighborhood SNAP office right away if you think you’ve fallen victim to a skimming or phishing scam. On the USDA’s fraud page, you can also report SNAP fraud by state.
Researching the refund regulations in your state should also take some time. You must adhere to its reporting theft requirements if you reside in a state that compensates for stolen benefits. Beneficiaries can, for instance, submit a police report, fill out a theft report, and report stolen EBT cards to the EBT customer support helpline in California.