By Yue Stella Yu
Most of us can now insert, swipe or tap our bank-issued credit or debit card.
But for Electronic Benefits Transfer card users — in California and across the nation — they can only swipe the cards to access benefits.
Without a security chip, experts say the method is risky. And roughly $10 million a month has been stolen in public benefits this year, reports CalMatters’ Jeanne Kuang.
There are few statewide policies protecting theft victims, and state agencies missed chances to stop fraud in its tracks.
In 2020, the state planned to dedicate investigators to EBT thefts and upgrade the cards to chip cards. Then the COVID pandemic happened. The state killed a $565,000 plan to step up EBT theft investigations. It didn’t revive the plan until April 2022.
Meanwhile, theft soared and taxpayers shouldered the cost, paying $87 million between July 2021 and this March in reimbursements to theft victims.
One of them is Guadalupe Rosales, a single mother of three in El Monte who relies on CalWorks, the state’s cash assistance program for poor families. Someone stole $1,300 from her account, and while she received reimbursements, her bills were overdue.
Rosales: “I feel like I’m in more debt than I was.”
Law enforcement officials and advocates have complained about the lack of security improvements from the state. Glenn Allen, legislative and policy chairman of the California Welfare Fraud Investigators Association, said the state told his group in 2018 adding chip cards would be too expensive.
Allen: “We told them, ‘You need to chip the cards now.’”
Finally, this year, Gov. Gavin Newsom’s administration committed to adding security chips to the benefit cards and allocated $50 million. But the chip card upgrades won’t happen for at least another six months.
Meanwhile, the Department of Social Services plans to launch a mobile app to allow recipients to freeze their accounts upon suspicious activity, and local governments are designating more personnel to reimbursement requests. Read more about what the state did and didn’t do in Jeanne’s investigation.
An important reminder: This fraud is different from the more publicized scams that hit the state Employment Development Department, the subject of a new CalMatters investigative series.
