EBT Scams on the Rise – California Losing $100M Annually

The California Department of Social Services admits it has lost $439 million in stolen Electronic Benefit Transfer (EBT) benefits since 2021. The program noticed a $100,000 monthly loss halfway through 2021, but did nothing. Now, the state is losing $10 million each month due to EBT theft.

The Department of Social Services is still investigating how widespread this theft has become but the trend is rising. In January of this year, $14,181,029 in taxpayer provided EBT funds simply vanished. Scammers can access account information in a variety of ways without gaining access to the actual EBT card. Skimming and phishing scams have been on the rise.

“EBT theft cruelly robs vulnerable individuals of the public benefits they are legally entitled to,” said District Attorney Hochman. “In addition to directly taking critical financial assistance away from children, families, and the elderly, public assistance fraud steals from taxpayers. Our Office will continue to vigilantly investigate and prosecute these cases and hold offenders fully accountable for their criminal actions. We are also working closely with victims and the LA County Department of Public Social Services to return the stolen benefits.”

Arrests are rare as these fraudulent transactions can be hard to trace but punishments are harsh. One such scammer in California faced 10 counts of felony identity theft, three counts of felony grand theft, and one misdemeanor charge of obstructing a law enforcement officer after stealing thousands through skimming practices. He now faces up to 10 years in prison.

Over 3 million people in the state receive EBT cards through SNAP (Supplemental Nutrition Assistance Program). No state can afford to lose $100 million per year due to fraud. This is something that needs to be reassessed at the federal level as EBT fraud occurs everywhere. Washington state reported lost $5.5 million to EBT card scams in 2024, for example. A recent police sweep of the DC area found 27 skimming devices, preventing an estimated loss of $7.2 million.

Did I mention that EBT cards do not have chips? Every bank forced users to switch to chip technology years ago, but the US government, per usual is behind. Sens. Bill Cassidy (R-La.) and John Fetterman (D-Pa.) have been trying to push through the Enhanced Cybersecurity for SNAP Act that would phase out swipe-only cards and provide recipients with additional information to manage their accounts. Yet, the act would also reimburse recipients with 100% of stolen funds which could lead to different forms of fraud.

Stealing from the poor is abhorrent behavior. A survey of 10,000 welfare recipients found that over half had little to no understanding of phishing or skimming scams. Around 87% reported taking some action to prevent their cards. A second survey of 1,700 EBT scam victims revealed that 44% were forced to borrow money elsewhere or go into debt, 53% became food insecure, and half of those victims have no idea how their funds were stolen. Only 55% of theft victims were reimbursed for their stolen funds. Something must be done to protect not only the welfare recipients but the taxpayers who may be forced to fund EBT fraud.