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United States: Complaints after skimming of food aid

In the United States, an association filed a complaint against the State of Massachusetts because of its failure to reimburse food aid funds stolen by skimming.

Antifraud action - November 23, 2022

The Massachusetts Law Reform Institute (MLRI), a U.S. non-profit organization, filed a class action lawsuit against the state of Massachusetts on November 4. The lawsuit was filed on behalf of low-income families whose Supplemental Nutrition and Assistance Program (SNAP) benefits, the federal food assistance program of the U.S. Department of Agriculture (USDA), were stolen by skimming. The total amount of funds stolen in the state reaches $1 million.

The USDA has issued safety recommendations to families. They do, however, require ownership and control of a smartphone, which is not the case for all SNAP recipients. Affected families have few ways to recover these stolen funds. On the one hand, it is very difficult to prove that the withdrawals made were fraudulent. On the other hand, federal law prohibits states from repaying these stolen benefits with federal funds.

In most American states, the Supplemental Nutrition and Assistance Program (SNAP), the federal food assistance program of the U.S. Department of Agriculture (USDA), uses pre-paid magnetic stripe bank cards without a chip to pay families.

However, this type of card is much easier to hack than a smart card. As one of the last services to use them massively, SNAP has become a prime target for cybercriminals. For several months, the country has been facing a wave of SNAP card skimming.

According to MLRI attorney Deborah Harris, the dual purpose of the lawsuit is to force Massachusetts to reimburse victims using state funds, while also convincing the USDA to change its rules to allow states to replace stolen benefits with federal funds.

Ultimately, we think it’s up to the USDA to step in and make the states aware that they have a duty to return the stolen benefits, and that the USDA should cover the costs, at least until a more secure solution, such as smart cards, is in place“, she defends.

The losses we’re talking about are relatively small compared to the total SNAP expenditures, which run into the billions. But if you’re a family that can’t pay for food because you suddenly have no money in your account, it’s devastating“, Harris said.

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