US victims of food-benefit theft could lose means of recovering funds

By Leah Douglas

(Reuters) - Recipients of U.S. federal food aid whose benefits are stolen will soon have no way to recoup the lost funds unless Congress takes action by the end of September.

Roughly 42 million Americans receive food aid from the Supplemental Nutrition Assistance Program. The benefits are loaded onto electronic benefit transfer cards, akin to debit cards, and can be stolen when illegal devices on card-swiping machines copy the card data.

Congress passed a law in 2022 that for the first time enabled states to replace stolen benefits. The provision expires on Sept. 30.

"Congress must act to ensure states can continue replacing stolen SNAP benefits by extending the law," said Cindy Long, the Department of Agriculture's deputy under secretary for food, nutrition and consumer services.

Between January 2023 and March 2024, $94 million in stolen benefits was returned to about 192,000 households in 48 states, the District of Columbia, and Guam, according to USDA data. California, Arkansas and the Virgin Islands did not report data on returned benefits.

The cards are susceptible to theft because they only have a magnetic stripe, while other credit and debit cards now commonly have more secure chips, said Ed Bolen, director of SNAP state strategies at the nonpartisan Center on Budget and Policy Priorities.

"It’s like a second-class banking system," he said.

Under USDA guidance, states are beginning to adopt chip cards with increased security, an agency spokesperson said.

In an August letter, a bipartisan group of 11 members of Congress asked leadership to include an extension of the provision in this month's stopgap spending bill.

The White House on Sept. 9 cited the absence of the extension as one reason President Joe Biden would veto the bill, which failed in the House on Wednesday.

(Reporting by Leah Douglas; Editing by Rod Nickel)