Something was very wrong with Jackie Kirks’ food stamp card.
While standing in the checkout line at a cavernous Albertsons grocery store in Long Beach, California, last December, Ms. Kirks was told she did not have enough money in her account to pay for the meal.
“That’s impossible,” he told the cashier.
Ms. Kirks, 70, knew she had saved a considerable sum in monthly benefits from the federal food assistance program, also known as the Supplemental Nutrition Assistance Program, or SNAP. Until September, she had been homeless, bouncing between weeklong stays in motels and sleeping in her car. To eat, she would purchase food through a state program that allowed adults over 60, people with disabilities and the homeless to purchase discounted meals using her food stamps. The program had cost much less than buying food, so most of the SNAP money had accumulated in her account.
But the Albertsons cashier was adamant: Mrs. Kirks only had $6 in her account. Alarm bells went off in her head when she left the supermarket with her hands empty except for a bottle of water and coffee creamer. She immediately called the state agency that oversaw food benefits. Her heart sank when a caseworker explained that someone had gained access to her card and depleted her balance of more than $4,000.
People like Ms. Kirks who rely on public benefits, such as food stamps, face an unrelenting threat: Fraudsters are using illegally installed skimming devices to obtain payment card data from unsuspecting victims who swipe their credit cards. payment through devices in stores or ATMs. Criminals then use the information to create fake payment cards and steal money from victims’ accounts.
Skimming schemes began to increase in popularity around 2022. Thieves target a variety of card payments, including those made with credit and debit cards. Social assistance programs that use payment cards are equally vulnerable. However, unlike bank-issued credit and debit cards, benefit cards issued by public agencies do not come with fraud protection, limiting the credit or debit cardholder’s liability for unauthorized charges. .
The plans have especially affected two social assistance programs: food stamps, which are payments to low-income families that can only be used to buy food, and cash assistance, which is a no-strings-attached sum. Both are monthly programs and are transferred to participants via a payment card known as “electronic benefit transfer” or EBT.
EBT cards, unlike debit and credit cards, use basic payment technology and carry only a magnetic stripe containing an account number. By comparison, most bank-issued credit and debit cards now have chips, which function like small computers that use encryption to protect account information.
State agencies that administer benefits have not adopted chip technology, in part because no federal law requires it. Not only are chip cards more expensive than magnetic stripe cards, but transitioning from a multibillion-dollar benefits program to a new payment structure can be a logistical challenge, advocates said.
“The lack of equal security for people with credit cards and people with EBT cards is shameful,” said Andrew Kazakes, an attorney with the Legal Aid Foundation of Los Angeles, which provides legal services and advocacy to residents of the city. “It is shameful that this inequality has persisted.”
The chasm between industry standard payment safeguards and outdated EBT technology has left EBT users vulnerable to digital theft. Here’s how it works: Thieves covertly slide card readers known as skimming devices into ATM card readers or on top of store point-of-sale systems. When a card is swiped, the skimming device can read and store the account information on its magnetic stripe. Skimming devices are used in conjunction with hidden video cameras, which capture PIN codes associated with accounts.
Skimming devices can be installed in seconds. Security camera footage has captured thieves placing card skimmers over card readers and ATM interfaces, typically when tellers are distracted or bank lobbies are empty.
Once EBT card information is recorded, it can be encoded onto any card with a magnetic stripe. The duplicate card can be used to purchase food or cash, depending on which card was cloned. Scammers can determine the amount of food stamps stored in an EBT by calling the state’s benefits hotline and can withdraw cash benefits at any ATM.
This comes at a significant cost, not only to benefit the recipients but also the public. According to the Department of Agriculture, which oversees the food stamp program, the federal government has spent at least $30 million repaying stolen benefits last year.
After being skimmed, Ms Kirks went 10 days without buying food. One of her favorite foods is croissants from Whole Foods, which remind her of Paris, where she emigrated from in the 1990s. But after her food stamps were stolen, she couldn’t buy them or get any of her other staples.
Ultimately, Ms. Kirks was partially reimbursed for the stolen money and received about $580. Federal law limits the amount fraud victims can get to two months of benefits. While she waited for reimbursement, Ms. Kirks lived on leftovers and pantry items, as well as occasional meals from the local Meals on Wheels program.
Other victims have had to eat canned food for days, visit food banks, skip meals or borrow money.
Jeanneth Chávez is a mother of two children and receives cash assistance through her EBT card. She is a longtime resident of Los Angeles, but in the spring of 2022, she had about $1,100 stolen from her profits in a recorded transaction that took place in New York.
When she discovered the money was missing, Ms. Chavez immediately began to worry about the possibility of being evicted. She receives her benefits on the second day of each month and the landlord demands payment of the rent within the first three days. She rushed to the local utility office hoping to address the problem, only to discover there was a long line of other women facing the exact same crisis.
“It was very devastating,” Chávez recalled. Everyone was given instructions on how to request a refund, but nothing else could be done in the short term. “The only other recourse they had for us was that, in case of eviction, they would hand out small pamphlets at halfway houses for women and children,” he said.
Ms. Chavez ended up reaching a settlement with her landlord, agreeing to pay an additional $100 in late payment fees. To get diapers for her daughter, she went to a dollar store with her father, who bought them for her. The poor quality of cheap diapers caused her baby to have diaper rash. Ms. Chavez was tested two more times that year. Now, every month, she stays up late on the day her benefits are deposited, making sure to change her PIN exactly at midnight to rule out potential scammers who may have obtained her card information.
“Only then will I be able to rest. Only then will I be able to sleep well at night,” said Ms. Chavez. “I feel anxiety in the days before receiving the funds. I don’t want to find myself in that situation because I have little people depending on me. How can I look at my baby in the face and know that she may not have the funds for her diapers?
The federal food stamp reimbursement program is scheduled to end in the fall, leaving few resources for victims of diversion. When Congress passed the Consolidated Appropriations Act of 2023, which funded the refunds, the law required restoration of stolen benefits only through September 30, 2024. There is currently no federal plan to extend refunds beyond that date .
Some states are taking their own steps to protect welfare recipients. California and Oklahoma are scheduled to test EBT chip cards this summer, which advocates hope will help safeguard benefits. While food stamps and cash aid are federally funded programs, states have significant leeway in how they administer them.
Last year, Maryland passed a law expanding refunds for stolen food stamps and cash assistance even if it meant taking money out of state funds, a model some advocates hope other states will adopt.
“It seems as if states think that just by putting the benefit on a card we did our job,” said Michelle Salomon Madaio, senior attorney at the Homeless Representation Project in Baltimore. “If you can’t put it on a card in a way that ensures that the family that is eligible for the benefit can actually access the benefit, then it’s like they never received the benefit.”
As for Ms. Kirks, back in Long Beach, the experience of having $4,000 stolen from her continues to make her feel exposed. In the past, she bought food for the homeless people in her neighborhood. Having experienced homelessness herself, she knew what it was like to depend on the good will of others. “That’s how I was raised,” she said.
She doesn’t do that as much anymore. Instead, she tries to use her SNAP card as little as possible, never knowing when her information might be stolen again. She doesn’t like being so pessimistic and distrustful, but she doesn’t feel like she has a choice. “Being cautious around everyone,” she said, “is not a way of life.”