This story was produced by NBC News’ Elizabeth Chuck as part of the 2022 National Fellowship at the USC Annenberg Center for Health Journalism.
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A growing number of low-income households have been robbed of the funds they use to purchase food, and with no federal fraud protections for them, most have little hope of ever getting reimbursed.
Thieves using hidden “skimming” devices are increasingly targeting benefit cards used by participants of the Supplemental Nutrition Assistance Program, or SNAP. The electronic thefts have risen so much in recent months that the U.S. Agriculture Department, which funds the program, issued a warning about SNAP skimming in late October.
States have instituted some prevention measures, such as asking participants to change their PINs. But the majority have not committed to reinstating benefits.
Federal dollars are also not an option for reimbursement because regulations prohibit federal funds from being used to replace stolen SNAP funds. A bill to change those regulations received bipartisan support this week, but hearings on it are not expected until the new year.
SNAP participants say they cannot wait that long after a month or more of stolen benefits plunged them into financial turmoil.
“There’s definitely a domino effect. You can’t make up for last month,” said Phoenix Richardson, a divorced mom in the Boston area whose four kids are ages 5 to 17. Last month, more than $900 was skimmed from Richardson’s account, leaving her with less than $3 on the electronic benefit transfer, or EBT, card where she receives her SNAP benefits.
James Hafner, a Tennessee father, had been saving money to buy a hoverboard that his 7-year-old wanted for Christmas. He was caring for his girlfriend after she had surgery when the couple’s card got skimmed, leaving him with no choice but to use the money he had hoped to allot for his son’s gift.
“That was the big thing he really wanted,” Hafner said. “We were doing good at the time and that put a big dent in it.”
EBT cards are not included in federal protections that largely shield credit and debit card holders in the event of fraud.
Even if there is evidence that card data was used thousands of miles away, only a handful of states, including California, Wisconsin and Michigan, will use state dollars to reinstate skimmed SNAP benefits, according to the American Public Human Services Association, which represents state and local human service agencies. Washington, D.C., also reimburses SNAP skimming victims.
Yet reports of skimming extend far beyond those areas. The Agriculture Department said it does not keep a state-by-state list of claims related to skimming, but in Massachusetts alone, more than $1.6 million in SNAP benefits was stolen from over 5,000 households from June to November, according to the Massachusetts Department of Transitional Assistance.
“For many SNAP beneficiaries, I think the message that they come away with is that they are second-class consumers.”
Betsy Gwin, senior attorney at the nonprofit Massachusetts Law Reform Institute
Betsy Gwin, senior attorney at the nonprofit Massachusetts Law Reform Institute, said it doesn’t make sense that the lowest-income consumers don’t have the same rights as credit, debit and other prepaid card holders. Her organization has filed a class-action lawsuit against the state’s Department of Transitional Assistance on behalf of skimming victims seeking that their stolen benefits be restored.
“For many SNAP beneficiaries, I think the message that they come away with is that they are second-class consumers,” she said.
How skimming happens
Skimming is not unique to EBT cards, but security measures such as contactless payments and embedded microchips have combated it in the credit card industry. No SNAP state agency uses cards with chips, according to the Agriculture Department.
Security experts say skimming usually occurs without the victim or store owners knowing.
Typically, skimmers place devices on card-swiping machines by cash registers. The devices are often plastic keypad overlays that look nearly identical to the card reader terminals themselves. (See a picture of the skimming overlays here.) The devices capture card data, along with PINs that have been entered, enabling skimmers to produce cloned cards.
“It takes about a blink of an eye for these guys to install it. They usually work in pairs,” said Brian Krebs, author of the cybersecurity blog Krebs on Security. “While one’s talking to the cashier, the other guy’s putting the thing on top.”
It’s unclear who is behind the rise in SNAP skimming and precisely how they are spending the funds, which can only be used at designated retailers.
In September, 16 people were charged in an alleged massive EBT fraud scheme in California, though nationwide thefts have continued to proliferate since then.
SNAP, formerly known as food stamps, is a far-reaching public assistance program: More than 41 million people across the U.S. participated in August, the most recent Agriculture Department data shows. Households with children account for 65% of participants, department data collected pre-pandemic shows. While the program is federally funded, it is administered by states.
Eligibility is based on income, among other factors, with $232.72 being the average monthly benefit for a SNAP participant. Benefits are distributed once monthly through EBT cards, which function like debit cards.
Rep. C.A. Dutch Ruppersberger, D-Md., introduced a bill to allow federal funds to be used for SNAP reimbursement, which is awaiting hearings in the House Committee on Agriculture. In the meantime, anti-hunger advocates say there’s no reason states can’t fill the gap for SNAP skimming victims.
“It doesn’t matter to them if it’s the state or the federal funding,” said Michelle Salomon Madaio, director of economic justice at the civil legal services organization Homeless Persons Representation Project in Maryland. “The focus should be on immediately reissuing and restoring those benefits.”
‘They took every penny’
Hafner, of Charlotte, Tennessee, was between subcontractor jobs in October when the EBT card he and his girlfriend use got skimmed of $460. They only found out when they tried to pay for a cart full of groceries and were told the card had insufficient funds.
“They took every penny,” Hafner said.
Hafner returned all $190 worth of groceries he had in his cart. The couple skipped meals or relied on ramen noodles to get them through the rest of the month.
“It hurts in more ways than you can explain.”
Skimming Victim James Hafner
“It hurts in more ways than you can explain,” he said. “This was going to be groceries for the next two weeks.”
The Tennessee Department of Human Services said that as of Dec. 1, 1,037 EBT card users reported that more than half a million dollars in benefits had been skimmed since July 1. Both the department as well as a spokeswoman for Gov. Bill Lee, a Republican, said the Department of Human Services was working with federal partners and law enforcement to determine next steps.
In Baltimore, Linda, a single mother who asked that her last name not be used because she is discussing personal finances, experienced a similar setback.
A cook and dietary aide at a nursing home that pays her $13.50 an hour, Linda and her 12-year-old daughter were already struggling to stay afloat. Then she discovered that while she was at work on Oct. 10, her card information had been used in Brooklyn, New York.
Telling her daughter that thieves had stolen all $560 in her account was difficult, Linda said.
“She looked at me. She started crying,” she said.
Food pantries and meal donations from their church helped. But their finances haven’t recovered, and Linda’s daughter is not optimistic that they will before the holidays.
“She still won’t make a list because she knows I probably won’t be able to buy anything for her,” Linda said.
The Maryland Department of Human Services said that as of Nov. 2, there had been 1,413 claims of EBT card fraud reported in Maryland this year. The SNAP theft claims total about $696,000, the agency said.
How states can help
California, one state that restores stolen benefits, has a law allowing state funds to be used that dates back to 2013. The California Department of Social Services said reimbursements from July 2021 to July 2022 for SNAP skimming totaled about $2.5 million; the state’s general fund allotted approximately $15 million for such reimbursements for the fiscal year 2022 to 2023, the agency said.
Ruppersberger’s bill to remove regulations that prohibit federal funds from being used to reinstate stolen SNAP benefits garnered bipartisan support Tuesday, when Rep. Brian Fitzpatrick, R-Pa., became a co-sponsor.
But with Congress racing to pass the omnibus spending bill, Ruppersberger’s bill is unlikely to get attention anytime soon. In the meantime, he said, he hoped publicity around it would pressure state executives to use their surplus money to help skimming victims.
Cindy Long, administrator of the USDA Food and Nutrition Service, called SNAP skimming “deplorable.” In a statement, the Agriculture Department said it welcomed “opportunities to work with Members of Congress, including Representative Ruppersberger, our federal and state partners, and other stakeholders engaged in this policy area on ways to better detect and prevent such fraud from occurring in the future.”
Microchips in EBT cards could be one way to reduce fraud, though that likely wouldn’t eliminate it entirely, Krebs, the security expert, said. Given that many of the instances of skimming take place out of state, Krebs suggested that EBT cards offer settings that users can default to where if their cards are used a certain distance away from where they live, the transaction is declined.
The Massachusetts Department of Transitional Assistance would not comment on the class-action lawsuit filed against its agency but said it had implemented multiple strategies to warn about skimming scams, including alerts via text and through the agency’s mobile app. It’s also required cardholders in locations with high incidences of skimming to set new PINs, guidance other states have issued as well.
That’s not enough for Richardson, the mother of four. Having her funds stolen meant Thanksgiving dinner for her family wasn’t possible. Even paying for snacks to put in her kids’ backpacks became a struggle, and getting her next monthly SNAP issuance did not make her finances whole, she said.
“We’re living off of almost fumes,” Richardson said. “The new benefits we’re getting, those are fumes, because we’re still missing a whole month.”