The Foundation for Government Accountability on Oct. 22 backed a U.S. Department of Agriculture proposal that would require food stamp cards to use chip and tap technology. The proposal would add security features intended to reduce theft from electronic benefit transfer accounts.
Under the proposal, households could monitor their accounts, restrict transactions outside their state and take steps to protect their cards. States also would be required to strengthen oversight of EBT payment terminals.
Fraud cases and replacement costs
Skimming operations can place concealed devices on store card readers to copy card information, which can then be used to make counterfeit cards and remove grocery benefits from recipients’ accounts.
The federal government replaced more than $360 million in stolen food stamp benefits for more than 750,000 households from October 2022 through December 2024. USDA’s inspector general projected another $233 million in losses during the following two years.
The Justice Department and USDA recently announced actions involving more than 40 defendants in food stamp fraud cases totaling nearly $42 million. Two Chicago store owners were accused of using stolen Ohio EBT cards in an alleged scheme valued at nearly $30 million; both stores had been approved to accept food stamps during the Biden administration.
Prosecutors said proceeds from that alleged scheme included cars sent overseas. In another case, a group largely made up of Romanian nationals who were in the country illegally allegedly used skimming devices to take benefits. Partners allegedly shipped more than 124,000 pounds of baby formula purchased with stolen benefits for black-market resale.
FGA statement
Jonathan Ingram of FGA said the technology requirement would extend the Trump administration’s fraud enforcement efforts to retail transactions. “This rule takes the war to the checkout line,” Ingram said.
He said chip technology is already standard for many debit and credit cards and would make older food stamp cards less vulnerable to theft. FGA promotes public-policy initiatives in all 50 states.