Taisha Simon had heard about people stealing money the federal government gives families for groceries, but she didn’t know she would become one of their victims.
It happened last June, when the 42-year-old mother went to the department store she does at the start of every month after receiving $939 in U.S. food aid for her and her four children.
It turns out his vulnerability was a government-issued plastic debit card that relies on outdated technology. The government uses electronic benefits transfer (EBT) cards to deliver food and cash assistance, and cardholders use them at the point of sale to pay for groceries.
When Simon checked his local Aldi, his trolley full of canned goods and vegetables, there was nothing left on his card. She paid what she could out of her own pocket, but it fell far short of meeting her family’s needs.
“I cry every day because my 5-year-old son has autism and my 17-year-old son has ADHD and OPD and they have food sensitivities,” said Simon, who works as an assistant manager at a retail store . “I wasn’t able to feed them like they were used to.”
Simon’s experience is unfortunately not uncommon. It’s part of a growing trend of identity theft targeting the 42 million low-income Americans who rely on EBT cards to receive government food and cash assistance.
“It’s a really lousy crime,” said Justin King, policy director at Propel, which offers a free mobile app for EBT cardholders. “You’re stealing this money from these people, my God. It’s devastating to people who are already on the edge.”
“Lack of incentive”
The ways to protect against this type of theft are simple and common among traditional debit and credit cards, provided there is the will to implement them.
“There is no profit to be made by doing better for people in the EBT system,” King said. “Unless Congress acts, we are unlikely to see progress and modernization of the system.”
EBT cards – which provide Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance to Needy Families (TANF) and other state-run aid – work like debit cards at stores when purchasing groceries and at ATMs when withdrawing cash.
But they lack a crucial security feature that everyday debit and credit cards carry: a small computer chip that’s almost impossible to clone.
Instead, EBT cards rely on the old-fashioned magnetic stripe for security. The strip contains all the information to clone the card, data that can be picked up by an illegal card reader rather than a legitimate one at a store or ATM when a card is swiped.
EBT cards also lack other security features commonly found on debit and credit cards, such as the ability to lock and unlock a card, check real-time balances, and receive alerts transaction.
“There is a lack of incentive in the system to provide top-notch financial services,” King said.
“More than outdated”
The lack of protections makes EBT cards a particularly easy target. They became even more lucrative for thieves when increased aid was distributed via these cards during the pandemic.
Once they had a cloned card in hand, fraudsters would simply withdraw any cash assistance through ATMs or spend money on high-demand groceries, like baby formula, that they could resell . Others made fictitious purchases at stores that employed accomplices to drain the funds.
The rush on EBT cards has become so extreme that the federal government has instituted a temporary refund program that expires at the end of September. According to the USDA’s Stolen Benefits Dashboard, the government has replaced nearly $62 million in stolen benefits.
But 36 percent of EBT theft victims never applied for replacement benefits because half of them didn’t know about the program at all, according to a survey released this month by Propel. A further 19% were refused reimbursement, including Taisha Simon.
“They said they don’t do refunds,” Simon said when she called her local benefits agency.
As a result, Simon had to make some difficult choices. She reduced her work hours to avoid paying tolls and gas to get from her home in North Philadelphia to the store in New Jersey. Public transportation was not reliable enough for her to get to work on time. She also had to decide what was paid and what wasn’t that month.
“It’s either keep your phone on and not have food. It’s lack of electricity, gas and water, or pay in full and not have food,” she said. “So we had to cut everything in half.”
Propel found that more than half of EBT theft victims were forced to skip meals or eat less, while 44% had to borrow money or go into debt. In total, it took Simon four months to recover financially from the theft.
“I was beyond overwhelmed,” she said.
“I prefer to have this security”
There is some hope that changes can be made as Congress takes up the 2024 farm bill, discussions that provide an opportunity to improve the EBT program. (The U.S. Department of Agriculture oversees the SNAP program.)
For example, Congress could expand the rebate program, require smart cards and provide the funding, King said. If left to the states, some of them may balk at the cost of converting to chip cards and refuse to do so, creating an environment in which thieves flood states that do not improve their EBT security.
“If you don’t do it everywhere, you’re just squeezing a ball,” he said.
Additionally, Congress should dedicate funds to improving the entire EBT infrastructure so that it functions like a regular bank, allowing EBT users to access their balances and banking history. their transactions “to the cent and to the minute, without fail,” King said, and to lock their cards electronically. or by telephone.
Simon completely agrees with these improvements which seem obvious to him. She already uses the locking of her bank cards.
“I hate it because I always have to call again and again, but it’s a safety thing and I like it because I don’t have time to get robbed,” she said.
“I’d rather have that security than not have it.”
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Janna Herron is a senior columnist at Yahoo Finance. Follow her on Twitter @JannaHerron.
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