As the House and Senate consider this year’s farm bill, policymakers must prioritize protecting EBT households from benefits theft by improving the safety features of EBT cards, ensuring the reimbursement process for stolen benefits is swift and efficient, and guaranteeing EBT households have reliable, consistent electronic access to their balance and transaction information.
EBT cards are lifelines for the tens of millions of low-income American families who rely on them to purchase nutritious food. However, the overwhelming majority of state-administered EBT programs do not require EBT processors to issue chip-enabled EBT cards, which offer significantly greater protection against skimming and phishing.
As a result, millions of EBT households are needlessly vulnerable to criminals who use card skimmers to steal EBT card numbers, duplicate them, and steal benefits from low-income households. Unfortunately, based on a recent survey of 10,000 SNAP recipients who regularly use our app, Providers, USDA’s data, though alarming, may actually under-represent the magnitude of this problem.
Over half of the respondents to our survey had limited or no understanding of how card skimming and phishing schemes work, leaving them highly vulnerable to criminal efforts to steal their benefits.
One-third of surveyed victims have had their benefits stolen via their EBT card more than once. Sadly, but predictably, the impact of benefits theft is significant: 53% of victims surveyed reported skipping meals or eating less as a result of their benefits being stolen, and 44% had to borrow money or go into debt to cover their losses.
Despite USDA’s best efforts to help EBT households that have fallen victim to benefits theft, victims often struggle to navigate the complex reimbursement process, with 55% of respondents to our survey who experienced benefits theft either filing unsuccessfully for reimbursement or not pursuing claims at all.
It doesn’t have to be this way. There exist commonsense safeguards against benefits theft and solutions to make it easier for EBT households who have been victims to receive reimbursement that Congress must enact in this year’s farm bill to protect America’s most financially vulnerable.
First, the farm bill should mandate a transition in all 50 states away from magnetic stripe technology, which is prone to card skimming, and towards chip EBT cards. Some states, including California and Oklahoma, have already announced their intention to make this transition as early as later this year. For other states, however, the cost of adopting chip technology may be a barrier.
It is, therefore, imperative that Congress provide federal funding to the states to incentivize the transition to chip EBT cards. Aside from the moral imperative of protecting EBT cardholders from benefits theft, such a federal investment will pay for itself. With USDA now responsible for reimbursing EBT accountholders for stolen benefits, a dramatic reduction in benefits theft will save the federal government tens of millions of dollars each year.
Congress should also extend USDA’s authority to reimburse victims of benefits theft beyond September 30 of this year. As card skimming remains rampant, EBT households often don’t have the resources to make ends meet on their own when their benefits have been stolen. The farm bill should further lift the existing cap of two reimbursements per victim. This arbitrary limit restricts victims who experience multiple incidents of theft through no fault of their own from receiving reimbursement for the benefits that have been stolen from them.
Finally, the farm bill should recognize the importance of providing EBT households with reliable electronic access to their balance and transaction data. While checking accountholders expect – and receive – near-instantaneous access to their account information online at any time, EBT accountholders often experience online portal outages and, in many cases, find incomplete information when they can log in. Unlike bank customers, EBT households may also be restricted from using third-party apps to help them better manage their finances.
The Consumer Financial Protection Bureau is expected to finalize a rule later this year providing consumers with a legal right to access and share access to their financial account data electronically. As the CFPB considers whether to include EBT accounts within the scope of its rule, the farm bill should unambiguously ensure EBT households receive the same rights.
Criminals are relentlessly targeting those Americans who depend on benefits programs to put food on their tables. By hastening the adoption of EBT chip cards, extending USDA’s benefits reimbursement authority, streamlining the claims process for EBT households who have had their benefits stolen, and ensuring that EBT accountholders have reliable electronic access to their account and balance information, Congress can make significant strides in safeguarding families reliant on public benefits.
