Electronic Theft Impacting SNAP Participants: Policy Solutions for Tackling the Threat and Strengthening Protections

By Julia Wu, Policy Intern, Fall 2024

SNAP participants receive their monthly benefits on an Electronic Benefit Transfer (EBT) card, which functions like a debit card. The transition from the paper vouchers used when the program first began to today’s EBT cards has significantly improved the consumer experience for SNAP participants. However, while EBT cards provide many benefits to the consumer experience, they also carry inherent risks of electronic theft that have long affected private bank card users.

A particular concern is skimming theft, where criminals place small devices on payment terminals to illegally capture the card information of unsuspecting users. This stolen data can then be used to clone the card and make unauthorized purchases, often in different states. In the past few years, this type of theft targeting SNAP participants has increased in several states, among them Colorado.

As criminals increasingly use card skimmers to steal benefits from vulnerable households, it’s critical to implement policies that both enhance card security and ensure long-term benefit replacements for victims. This page will discuss the policy solutions needed to protect SNAP participants from the negative impacts of electronic theft. For tips on using your EBT card and keeping it safe, click here.

Benefit Replacements: A Critical Need

When households lose their SNAP benefits to skimming, they often make difficult tradeoffs between food and other essentials. For low-income households, the sudden loss of these benefits means having to choose between feeding their families and paying for critical expenses such as rent, utilities, or healthcare. Some households may skip meals or reduce their grocery budgets to cover bills, while others may delay paying for medications or forgo necessary healthcare to afford food. This heightened level of financial stress resulting from electronic theft, highlights the importance of timely, long-term benefit replacements for SNAP participants.

For private bank cardholders, protections are in place to restore stolen funds in cases of electronic theft. However, until recently, SNAP participants had no such recourse. This gap in protection prompted calls for Congress to ensure that benefits can be replaced with federal funds when theft targeting SNAP participants occurs. In December 2022, Congress passed an act that included temporary protections for SNAP participants, allowing for temporary benefits replacement of up to two months of stolen benefits for affected SNAP participants.  While this was a significant step forward, this benefit replacement provision is temporary, so the need for a long-term solution remains urgent.

Card Security: Ensuring Access While Enhancing Protection

Electronic theft and card skimming have been persistent issues for decades, as electronic theft has long targeted private bank cardholders. However, while private bank customers have been protected by modern security measures, EBT cards have not kept pace with modern technology. Factors like the cost and logistical challenges of upgrading systems, along with the lack of laws or regulations requiring EBT cards to meet modern security standards, have left many SNAP participants vulnerable to less secure card technology.

Unlike traditional bank cards, which offer chip and touchless technology among other security measures, EBT cards rely on outdated magnetic strip technology, making them more vulnerable to skimming. This poses a serious policy gap, as many SNAP participants are left without essential benefits if their cards are skimmed.

Ensuring that EBT card technology is modernized in line with private consumer protections is essential to reducing theft. A key proposal for enhancing card security is the introduction of chip-enabled EBT cards to replace magnetic strips, EMV chips generate a unique code for each transaction, making it harder for criminals to clone card information.

However, a significant challenge in addressing EBT card skimming is striking a balance between security and accessibility. Many recipients of SNAP may experience technology as a barrier and have difficulty navigating complex security systems. For example, two-factor authentication is a security measure that requires users to provide two forms of identification to access their account. While it enhances protection against theft, it can create accessibility challenges for SNAP participants. Many may lack access to smartphones, reliable internet, or have limited digital literacy, making it difficult to navigate the process. Additionally, language barriers and unreliable phone access can further complicate their ability to use two-factor authentication. Therefore, any solution to enhance card security must include input from participants to ensure that changes do not inadvertently make accessing benefits more difficult.

Legislative Action: A Need for Long-Term Solutions

While some temporary measures have been implemented to address immediate issues, there is a growing recognition that long-term solutions are needed to comprehensively tackle EBT skimming. Key components of long-term solutions include:

• Permanent benefits replacement for stolen funds, ensuring that recipients do not face financial hardship when their cards are skimmed.
• Card modernization to protect against future theft, including the transition to more secure technologies.

Proposed legislation such as the following Farm Bill marker bills, aim to enhance EBT card security:

• • Enhanced Cybersecurity Act (S.3893/H.R.7585): This aims to prevent criminals from exploiting vulnerabilities in EBT cards and stealing benefits from low-income families. It modernizes cybersecurity standards for EBT cards, which haven’t been updated since 2010, by mandating the use of theft-resistant chips and phasing out outdated, magnetic strips.
  • Stop Scams Act: This aims to protect recipients of SNAP, WIC, and TANF from the growing threat of card skimming by requiring state agencies to inform beneficiaries about the risks and the steps they can take if their benefits are stolen. It also mandates that the Secretary of Agriculture establish new cybersecurity and digital regulations for states to address vulnerabilities in the EBT system. Additionally, the act calls for all states to upgrade to more secure chip-enabled cards within five years.

  For more information on these proposed measures you can visit our Farm Bill page.

  Our Priorities: Protecting SNAP Participants from Theft

  At Hunger Free Colorado, we are committed to advocating for:

  1. 1. 1. Stronger security measures for EBT cards that are accessible and user-friendly for participants.
        2. Long term benefit replacement for victims of skimming, ensuring that no family goes without food due to theft.
        3. Long-term legislative solutions, including the Enhanced Cybersecurity Act and the Stop Scams Act, to provide permanent protections against skimming and theft.
        4. Participant-centered approaches in the design and implementation of new security measures to ensure accessibility and ease of use for all recipients.

  These priorities align with our mission to support and empower SNAP participants, ensuring that they have consistent access to food resources without the fear of theft. Federal and state policymakers must work together to create an EBT system that is both secure and accessible, protecting participants from skimming while safeguarding their ability to access essential benefits.

  To send a letter to your representatives to support skimming protections and enhance and protect SNAP, click here.