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How scammers steal money from food stamp recipients

There was something wrong with Jackie Kirks’ food stamp card.

Last December, as Ms. Kirks stood in the checkout line at a massive Albertsons grocery store in Long Beach, California, she was told she didn’t have enough money in her account to pay for groceries.

“That’s impossible,” she told the cashier.

Ms. Kirks, 70, knew she had saved a significant amount in monthly benefits from the federal food assistance program, also known as the Supplemental Nutrition Assistance Program, or SNAP. By September, she was homeless, shuttling between week-long stays in motels and sleeping in her car. In order to eat, she overbought groceries a government program This allowed adults age 60 and older, people with disabilities and the homeless to purchase discounted meals with their food stamps. The program had cost far less than buying groceries, so most of the SNAP money had accumulated in her account.

But the cashier at Albertsons was adamant: Ms. Kirks only had $6 in her account. Alarm bells rang in her head as she left the supermarket, empty-handed except for a bottle of water and coffee creamer. She immediately called the state agency that monitored food benefits. Her heart sank when a clerk explained that someone had gained access to her card and charged over $4,000 in her balance.

People like Ms. Kirks, who rely on public benefits like food stamps, face an unrelenting threat: fraudsters using illegally installed products Skimmer equipment to steal payment card data from unsuspecting victims who swipe their payment cards through devices in stores or ATMs. The criminals then use the information to create fake payment cards and steal money from victims’ accounts.

Skimming plans were started Increase in prevalence Circa 2022. Thieves are targeting a variety of card-based payments, including those made using credit and debit cards. Welfare programs that use payment cards are similarly vulnerable. However, unlike credit and debit cards issued by banks, advantage cards issued by public bodies do not have fraud protection that limits the credit or debit card holder’s liability for unauthorized charges.

Two welfare programs were hit particularly hard by the measures: food stamps, which are payments to low-income families that can only be used to buy food, and cash assistance, which is a non-binding sum. Both programs are monthly programs that are transferred to participants via a payment card called an Electronic Benefit Transfer, or EBT

EBT cards, unlike debit and credit cards, use basic payment technology and only carry a magnetic strip that contains an account number. By comparison, most credit and debit cards issued by banks now have chips that act as tiny computers, protecting account information using encryption.

State agencies that administer benefits have not adopted chip technology in part because there is no federal law requiring it. Not only are chip cards more expensive than magnetic stripe cards, but converting a multi-billion dollar benefit program to a new payment structure can pose a logistical challenge, advocates say.

“The lack of equal security for people with credit cards and people with EBT cards is a disgrace,” said Andrew Kazakes, an attorney at the Legal Aid Foundation of Los Angeles, which provides legal services and advocacy to the city’s residents. “It is shameful that this inequality continues.”

The gap between industry-standard payment protection measures and outdated EBT technology has left EBT users vulnerable to digital theft. Here’s how it works: Thieves secretly insert card readers, so-called skimming devices, into card readers at ATMs or on cash register systems in stores. When a card is swiped, the skimming device can read and store the account information on its magnetic strip. Skimming devices are used in conjunction with hidden video cameras that capture PIN codes associated with accounts.

Skimming devices can be installed in seconds. Security Camera footage caught thieves grabbing card readers on top of card readers and ATM interfacestypically when tellers are distracted or bank vestibules are empty.

Once EBT card information is recorded, it can be encoded onto any card with a magnetic stripe. The duplicated card can be used for groceries or cash depending on the cloned card. Fraudsters can determine the amount of food stamps stored on an EBT by calling a state’s welfare hotline and withdrawing cash benefits from any ATM

This comes at a significant cost, not only to those receiving benefits but also to the public. According to the Agriculture Department, which oversees the food stamp program, the federal government has spent at least 30 million dollars Reimbursement of stolen services in the past year.

After being skimmed, Ms. Kirks was not required to purchase food for ten days. One of her favorite foods are the croissants from Whole Foods, which remind her of Paris, where she immigrated in the 1990s. But after her food stamps were stolen, she was unable to buy them or get any of her other basic necessities.

Eventually, Ms. Kirks was partially reimbursed for the stolen money, receiving approximately $580. Federal law limits the amount skimming victims can receive to two months’ worth of benefits. While waiting for reimbursement, Ms. Kirks lived on leftovers and pantry items, as well as occasional meals from the local Meals on Wheels program.

Other victims had to eat canned food for days, visit food banks, skip meals or borrow money.

Jeanneth Chavez is a mother of two and receives cash assistance through her EBT card. She has lived in Los Angeles for a long time, but in the spring of 2022, approximately $1,100 was stolen from her benefits in a transaction that was verified to have taken place in New York.

When she discovered the money was missing, Ms. Chavez immediately began to fear eviction. She receives her benefits on the second day of each month and her landlord requires payment of rent within the first three days. She ran to the local public services office hoping to address the issue, only to find that there was a long line of other women struggling with the exact same crisis.

“It was very devastating,” Ms. Chavez recalled. They were all given instructions on how to request a refund, but there was nothing else that could be done in the short term. “The only other resource they had for us was that in the event of an eviction they distributed small pamphlets to social shelters for women and children,” she said.

Ms. Chavez eventually struck a deal with her landlord and agreed to pay an additional $100 late payment fee. To get diapers for her daughter, she went to a dollar store with her father, who bought them for her. The poor quality of the cheap diapers caused her baby to develop diaper rash. Ms. Chavez was flown over twice more this year. Now she stays up late every month on the day her benefits are deposited, making sure to change her PIN at exactly midnight to deter potential fraudsters who may have gotten hold of her card information.

“Only then can I rest. Only then can I sleep well,” said Ms. Chavez. “In the days before I receive the money, I am scared. I don’t want to be in this predicament because I have little people who depend on me. How can I look my baby in the face and know that I may not have money for his diapers?”

The federal food stamp reimbursement program is set to expire in the fall, leaving the victims of the food stamps with little room for maneuver. When Congress passed the Consolidated Appropriations Act of 2023, which funded reimbursements, the law only required the restoration of stolen benefits until September 30, 2024. There is currently no federal plan to extend reimbursements beyond that date.

Some states are taking their own measures to protect social assistance recipients. California and Oklahoma plan to conduct a pilot of EBT chip cards this summer, which advocates hope will help secure the benefits. While food stamps and cash assistance are federally funded programs, states have considerable latitude in how they administer them.

Last year, Maryland passed a law to do so expanded Reimbursements for stolen food stamps and cash assistance, even if they meant drawing on state resources — a model that some advocates hope other states would adopt.

“It seems to me like the states think that by just putting the benefit on a card, we’ve done our job,” said Michelle Salomon Madaio, a senior attorney at the Homeless Persons Representation Project in Baltimore. “If you can’t put it on a card so that the family that’s entitled to the benefit can actually access the benefit, then it’s like they never received the benefit.”

As for Ms. Kirks, who is back in Long Beach, she still feels exposed by the experience of being bilked out of $4,000. She used to buy food for the homeless in her neighborhood. Having experienced homelessness herself, she knew what it was like to depend on the goodwill of others. “That’s how I was raised,” she said.

She doesn’t do that as often anymore. Instead, she tries to use her SNAP card as little as possible, not knowing when her information might be stolen again. She doesn’t like being so pessimistic and suspicious, but she doesn’t feel like she has a choice. “Being wary of everyone,” she said, “is not a way of life.”

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