PORTLAND, Ore. — Life is a juggling act for Lisa Jones. She’s a single mother with three young kids. The 45-year-old works two part-time jobs as copy writer and office manager. She also takes classes at Portland Community College.
“I work my butt off every day,” explained Jones before heading off to take one child to a doctor’s appointment. “There’s never a dull moment.”
On January 18, life got even more complicated for Jones after she went into a Target store to buy a few groceries. When she swiped her Oregon Trail Card at check-out, the kiosk warned, “Invalid PIN code.” So, she tried again. It didn’t work.
One day later, Jones logged into her account and found the bulk of her monthly food stamps, or Supplemental Nutrition Assistance Program (SNAP) benefits, were gone.
“I was just nauseous. Really sick to my stomach,” Jones said.
A closer look revealed someone used Jones’ account at 7:08 a.m. on January 19 to make a $498.11 purchase at a Walmart store in Wiggins, Mississippi.
Jones reported the theft to Oregon Department of Human Services, but she said a worker told her there was nothing they could do. Currently, the state doesn’t refund stolen SNAP benefits.
“We rely on those food benefits to eat,” said Jones. “That’s a huge impact on our family.”
In the following days, Jones reached out to the Washington County Sheriff’s Office and police in Wiggins, Mississippi. She called the FBI. She even tried reaching members of Congress, the state legislature, lawyers and advocates. They all seemed compassionate, Jones said, but no one could really help get her money back or solve the crime.
“It is not just me. I started Googling it and I realized this is a nationwide problem right now. We’re talking millions and millions of dollars,” said Jones.
A KGW investigation documented how fraudsters are wiping out food stamps and cash assistance benefits from low-income Oregonians. One Portland mother, Tricia Collins, had $820 in benefits stolen from her over a two-month span.
“My money was gone, and I didn’t understand what was going on,” she said.
Fraud rates increasing
More than 700,000 Oregonians, or one is six residents, receive SNAP benefits, according to data from the U.S. Department of Agriculture. SNAP is a need-based program that gives low-income families and individuals help to buy food using government issued Electronic Benefit Transfer (EBT) cards.
In October, the USDA issued a nationwide warning about SNAP fraud in which thieves use “card skimming” to steal SNAP benefits.
Last year, the Oregon DHS Fraud Investigation Unit received roughly 55 complaints about EBT card skimming, although the actual number of occurrences is likely much higher, explained an agency spokesperson.
“Unfortunately, ODHS does not currently track complaints or rates of fraud specifically related to EBT card skimming,” said Jake Sunderland, Oregon DHS spokesperson. “Moving forward, ODHS will be closely tracking and monitoring EBT card skimmer fraud so that we can better track the impact this has on EBT card holders in Oregon.”
Haywood Talcove of LexisNexis Risk Solutions’ Government Group warns the problem will only get worse.
“It is about to take off like a rocket ship,” said Talcove.
Talcove estimates food stamp fraud in Oregon likely amounts to $40 million dollars a month. His estimate is based on state numbers compared with national data — where reports of scammers ripping off SNAP benefits is through the roof, Talcove said.
The security expert also pointed to recent chatter on the dark web, which included screen shots and videos where criminals appeared to be bragging about SNAP fraud.
No system for reimbursement
Crooks often skim EBT cards and pin numbers by secretly installing a device on ATM readers that records the information when cards are swiped through, then create fake cards and drain accounts.
“What the criminals have figured out is that they don’t get caught and government never runs out of money. They just print more,” said Talcove.
The security expert warned EBT fraud has many of the same characteristics as unemployment fraud — which cost the government billions of dollars in losses during the pandemic. International and domestic crime rings took advantage of old, outdated systems to rip off unemployment checks.
“It’s the same players,” warned Talcove. “The same organized criminal groups are now attacking the food stamp program.”
Congress is reacting to the problem. In December, Congress approved the 2023 Consolidated Appropriations Act that allows SNAP recipients to be reimbursed for stolen benefits.
“Oregonians counting on electronic benefit transfers to feed their families must be able to use the cards providing those resources free of fear that fraudsters are ripping them off,” said Oregon Senator Ron Wyden, through a spokesperson.
The problem is Oregon, like most states, hasn’t implemented the changes yet allowing EBT fraud victims to be reimbursed for their losses.
“ODHS is currently waiting for federal guidance on how this replacement process will work. We will be sharing more information about this once we are able to replace stolen SNAP benefits,” explained Jake Sunderland.
“That’s a great afterthought,” said Jones, the fraud victim. “You’re going to put all this money back on my card, but in this moment — where am I going to get that $500 from? Is it going to come out of my PGE bill for the month? Gas for my car? Medications for my children or myself?”
Congress also told the UDSA to provide guidance to states on additional fraud protection. Currently, EBT cardholders don’t have access to the same security technology as everybody else using U.S. banking system. Suspicious, out-of-state purchases seem to go unnoticed, and EBT cards don’t have a chip to avoid skimming. They just have the old magnetic stripe, making them ripe for fraud.
“This is millions, and millions, and millions of dollars nationwide of our taxpayers’ money that is getting taken. And you can’t pay for a little chip card?” asked Jones.
USDA spokesperson Julie Yee explained in an email to KGW that the agency will “promulgate regulations through notice-and-comment rulemaking” to require states to take extra security measures. USDA did not provide a timeline for when the changes might happen.
“Protecting SNAP benefits is something that USDA takes very seriously. We will continue to do everything in our power to combat SNAP fraud,” wrote Yee.
Fixing EBT card vulnerabilities
Advocates applaud Congress but admit the changes must come quickly. Low-income families are literally being robbed of their food money.
“States should be moving on this now, today, last year. That cannot be stated strongly enough” said Victoria Negus of the Massachusetts Law Reform Institute. The non-profit filed a class-action lawsuit in Massachusetts on behalf of EBT recipients who had benefits stolen.
Negus admits updating EBT cards is complicated. Unlike credit cards where an old card continues to work if a new card is issued, EBT cards are typically deactivated when a new card is issued. This could unintentionally cause recipients to lose access to their SNAP benefits.
Additionally, Negus explained there are only two vendors, FIS and Conduent, with contracts to provide EBT cards nationwide. States don’t have the ability to shop around looking for a vendor who can move quickly to replace outdated EBT cards with newer chip-embedded cards.
Despite these challenges, Negus argues states should be doing the legwork to prepare for replacement cards and exploring other options to prevent EBT fraud.
“I do think states have a role in driving the conversation forward with more urgency because they’re the ones stuck having to talk to families that can’t put food on the table,” said Negus.
Oregon DHS admits, like many other states, it is seeing a higher number of EBT cards skimming fraud cases than in prior years.
“We are committed to doing everything we can to protect people with EBT cards from fraud, and are researching and analyzing this issue, including consulting with our partners at the USDA to urgently identify new strategies we can use to protect EBT card holders in Oregon from card skimming fraud,” said Sunderland, the Oregon DHS spokesperson.
Until things change, there is no recourse for most victims of EBT fraud. The food stamp benefits are gone, they could be stolen again and their families need to eat.
“I’m not able to focus,” said Jones. “I’m a part-time student. I work part-time. And I’m a mom of three and it keeps me up at night worried sick.”