AUSTIN, Texas — Officials throughout the U.S are warning residents about how thieves are stealing benefits from low-income Americans, including Texans, making it harder for parents to feed their families.
Criminals are installing card skimming devices onto payment systems at grocery stores and locations that accept Supplemental Nutrition Assistance Program (SNAP) payments, according to Haywood Talcove, CEO of LexisNexis Risk Solutions' Government Group.
Skimmers, which attach to point-of-sale systems and collect a user’s card number, enable hackers to collect data from the card that is placed on them. For those that use SNAP benefits, the skimmer collects data from Electronic Benefits Transfer cards, also known as Lone Star Cards in Texas, that social assistance recipients use to buy food.
Once scammers have that information, they drain the victims’ accounts.
The electronic thefts have rapidly increased in recent months that the United States Agriculture Department (USDA), which funds the program, issued a warning about SNAP skimming thefts in October.
But, phishing scams by call and text message are also a problem.
“I’ve had reports from all over the country, including Texas, where they’re just mass-calling and getting people randomly to respond and put in [their] information," Talcove said.
States, including Texas, have instituted some preventative measures, such as asking participants to change their PINs. But the majority have not committed to reinstating benefits. Instead, victims have the option of applying for emergency assistance, but Talcove said it takes as early as four weeks and as late as eight weeks to receive them.
"The problem is that [emergency assistance] is significantly less [money] than what is on your benefit card," Talcove said. "The other problem is how long it takes to fix it, right? Calling the number, going on to the website, providing the information...the wait times have gotten significant as the amount of fraud has increased so rapidly, they don't have the resources to mitigate it."
Stephen Estes of Austin, who does not receive benefits, received a scam text message last week. It asked Estes to call a number provided because his benefit card was frozen.
“I call the number and it sounds like I’m talking to the government, maybe the USDA," Estes said. "It’s like, you know, 'there’s been fraud on your account, please enter your 16 digit account number.' It goes, 'thank you, your account has been unfrozen.'"
Initially, Estes said he was simply curious to see what would happen. But then he realized this was a legitimate scam that was working on vulnerable people.
"They’re just blasting this out to tons of people, and people respond," Estes said. “The fact that there are criminals that are setting their sights on the vulnerable, like, it’s really astounding."
Talcove said there are "very basic flaws" the USDA has allowed to occur with the program but could fix to better protect Lone Star Card holders.
"The first thing is they should not be using the cards they're using. They should be chip enabled. You could just tap them on the machine and there'd be no exchange of information and it would be encrypted and you couldn't steal the pin," Talcove said. "The second thing is, in an effort to help people to make it easier, you're allowed to have as many cards from as many different people as you can carry. There's no limit."
Talcove said the problem with having no limit to how many benefit cards you can carry is it's hard to pinpoint who is a thief and who is not. He called this "bundling cards."
KVUE reached out to Texas Health and Human Services (HHSC) to ask what cardholders should do to protect themselves against fraud, or if they believe they've be scammed.
HHSC replied with the following information:
"Texas Health and Human Services Commission (HHSC) communicates with Supplemental Nutrition Assistance Program (SNAP) recipients via mailed notices; YourTexasBenefits.com; Your Texas Benefits mobile app, and; temporary messages on the Interactive Voice Response system when individuals call 2-1-1, Option 2 or the Lone Star Help Desk."
"HHSC does not text Lone Star cardholders regarding their Lone Star card. Additionally, HHSC does not ask cardholders for their Lone Star Card number or personal identification number (PIN). If cardholders receive a text message regarding their Lone Star card or believe their card has been compromised, they should call the Lone Star Help Desk at 1-800-777-7328, a toll-free number that can be found on the back of their card. They should also report the theft to local law enforcement and the USDA Office of Inspector General by calling 800-424-9121 or online. This information can also be found on the Welcome Brochure (attached) sent to all SNAP recipients."
"The HHSC Office of Inspector General (OIG) recently published a fraud alert on this issue. The OIG also receives reports of SNAP fraud via its fraud hotline. Please reach out to OIG Press Officer Jeremy Fuchs (jeremy.fuchs@hhs.texas.gov) for fraud statistics related to Lone Star Cards."
"HHSC provides education to SNAP and Temporary Assistance for Needy Families (TANF) recipients by distributing materials when a card is issued on how to protect their benefits. HHSC has placed scam advisory messages on the Lone Star Card help line for customers to hear and also on YourTexasBenefits.com. Messages have also been shared on HHSC and HHSC OIG social media platforms and 2-1-1 for customer awareness. In addition, HHSC employees are participating in workgroups with the Food and Nutrition Service, other states, the OIG, and our EBT vendor to help identify ways to prevent fraudulent activity."
"The Consolidated Appropriations Act 2023, passed in December 2022, will require states to replace benefits stolen between Oct. 1, 2022 to Sept. 30, 2024. The act allows states to replace either the full amount of benefits stolen or the two most recent months of the household’s monthly allotment (whichever is less), and will permit no more than two instances of benefits replacements per household per federal fiscal year. The USDA will provide further guidance to states by the end of this month."
HHSC told KVUE it is developing a plan to validate, replace benefits and report the scope and frequency of benefit theft associated with skimming to the USDA. This plan must be submitted to USDA for approval by the end of February 2023 and will include the following:
- Criteria to determine suspected fraud;
- Procedures for documentation of benefit replacement;
- Procedures to inform households of their right to a fair hearing;
- Description of the benefit theft prevention measures the state is taking, and;
- Submission of data reports on theft and replacement to USDA.
Talcove said the USDA needs to work faster to keep benefit recipients safe.
“The speed in which these criminal groups are attacking this system at scale, the use of antiquated technologies, old processes and systems, and the lack of enforcement by the USDA are making our most vulnerable at incredible risk right now," Talcove said.