Lawsuit seeks food benefits stolen by skimmers – Krebs on safety
A non-profit organization is suing the state of Massachusetts on behalf of thousands of low-income families who have been collectively denied food aid benefits by cash machines and card skimming devices installed secretly at grocery store checkout lanes across the state. More than $1 million was robbed. Federal law prevents converting these benefits using federal funds, and a recent rash of skimming incidents across the country has disproportionately affected those receiving food aid via state-issued prepaid debit cards. .
on November 4, Massachusetts Law Reform Institute (MLRI) filed a class action lawsuit on behalf of low-income families whose Supplemental Nutrition and Support Program (SNAP) benefits were stolen from their accounts. The Snap program serves more than one million people in Massachusetts and 41 million nationally.
“Over the past few months, thieves have stolen over a million SNAP dollars from thousands of Massachusetts families—endangering their nutrition and economic stability,” MLRI said in a statement on the lawsuit. “The criminals have attached a skimming device at the POS (point of sale) terminal to capture the home’s account information and PIN. Criminals then use that information to create counterfeit cards and steal Snap profits.
Announcing the lawsuit, the MRLI linked to a story KrebsOnSecurity published last month that examined how Skimming thieves increasingly targeting SNAP payment card holders nationwide. The story looks at how most of the Snap benefit cards issued by the states do not include the latest chip technology which makes them more difficult and costly for thieves to clone them.
The story also highlights how Snap cardholders typically have little recourse for recovering any stolen funds – even unlikely cases where the victim has accumulated mountains of evidence to show state and federal officials that fraudulent withdrawals were not theirs,
Deborah Harris MLRI has a Staff Attorney. Harris said the goal of the lawsuit is to force Massachusetts to use state funds to reimburse SNAP skimming victims and explain US Department of Agriculture (USDA) — which funds the program that draws from states — to change their policies and allows states to replace stolen benefits with federal funds.
“Ultimately we think it is the USDA that needs to step in and tell the states that it is their duty to restore the stolen benefits, and the USDA will cover the cost, at least until better ones like chip cards. Don’t have security,” Harris told KrebsOn Security.
“The losses we are talking about are relatively small in planning for total Snap expenditures which are billions,” she said. “But if you’re a family that can’t pay for food because suddenly you don’t have money in your account, it’s devastating to the family.”
The USDA has not said whether it will help states restore the stolen money. But on 31 October 2022 the agency ongoing guidance (PDF) whose primary instructions were included in the appendix titled Card Security Options Available to Families. Notably, the USDA did not mention the idea of moving to a chip-based SNAP benefit card.
“The guidance generally entitles households to prevent theft of their benefits as well as to account for losses incurred when the household is no fault of their own,” Harris said. “Many of the recommendations are not practical for families that do not have a smartphone to receive text messages and are not able to change their PIN after each transaction and keep track of the new PIN.”
Harris said three of the four recommendations are not currently available in Massachusetts, and they are not currently available in other states. For example, she said, Massachusetts households do not have the option to freeze or lock their cards between transactions. Nor do they receive alerts about transactions. And of course they have no way of preventing out-of-state transactions.
“Perhaps these are the options that [card] Processors and states can provide that, but they are no longer available as far as we know,” Harris said. “Most likely it will take time to implement them.”
Center for Law and Social Policy (CLASP) Recently published Five ways state agencies can support EBT users at risk of skimming, The CLASP says it’s true that unless the loss was caused by a “system error,” states can’t use federal funds to replace benefits, states can use their own funds.
“Doing so will ensure that families do not have to go without food, gas money or month’s rent,” wrote CLASP.
This card will help to address the symptoms of skimming, but not the root cause. There’s hardly any obvious suggestion, which is to equip SNAP benefit cards with the same security technology as practically everyone who participates in the U.S. banking system.
There are several reasons why most state-issued Snap benefit cards do not include chips. For starters, no one says they have to. In addition, chip cards versus plain old magnetic stripe cards are significantly more expensive to produce, and many state aid programs are chronically underfunded. Finally, there is no vocal (or at least well-heeled) constituency advocating for change.
A copy of the class action complaint lodged by MLRI is available Here,
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