Fraudsters are targeting the most vulnerable members of society. It’s time we fight back.
Imagine that you’re a single parent relying on your monthly Supplemental Nutrition Assistance Program (SNAP) benefits to put food on the table. One day, you go to the store, only to discover your government-issued funds have vanished. The culprit? Fraudsters using stolen data from your Electronic Benefits Transfer (EBT) card to drain your account.
You don’t really have to imagine it at all. In fact, EBT card fraud has been surging, leaving countless families in financial despair. California has been losing nearly $2 million a month to EBT thieves since 2022. New York saw 61,000 instances of EBT card fraud in just six months and lost $17 million during that time. Similar fraud instances are happening in Pennsylvania, New Jersey, and Delaware. And now, state governments are even refusing to reimburse families who have been drained of their EBT funds, leaving the most vulnerable people in dire situations.
EBT fraud is a scourge on our society, and something that needs a solution today. Let’s explore why this is happening, why it’s such a critical issue, and how available fraud-prevention technology can offer a game-changing solution.
What’s Driving the Increase in EBT Card Fraud?
EBT cards function like debit cards, allowing recipients to access government assistance funds that have been allocated to their household. However, unlike credit cards and much like standard debit cards, they lack many fraud protections. And because the funds are instantly available via EBT cards, they are often an easy target for criminals.
Fraudsters have become alarmingly sophisticated, using skimming devices and data breaches to steal card information. Once they have the details, they can create counterfeit cards or make card-not-present online purchases, draining accounts before victims even realize what’s happened. According to 2022 data from the Government Accountability Office, EBT fraud was estimated to cost taxpayers up to $4.7 billion annually and it seems to be getting worse every year.
While some states have started issuing EBT cards with EMV chips for added security, it’s clear that a single static layer of protection isn’t enough to combat today’s advanced cyber threats. After all, both consumer credit cards and debit cards with EMV chips still see fraudulent activity on an hour-by-hour basis. Remember, the EMV chip is ineffective for electronic transactions where the card isn’t present, and that’s increasingly the preferred method of card fraudsters who continue to evolve their methods, making it critical for the government to stay one step ahead.
Why EBT Card Fraud Hits Harder
EBT card fraud is one of the most sinister types of fraud due to who the victims tend to be and how vulnerable they are in society. EBT card fraud doesn’t just lead to financial losses—it has profound social consequences. The victims are often families who are already struggling to make ends meet. Unlike credit cards, where fraudulent charges can often be reversed, the loss of SNAP benefits is typically permanent. For families relying on this assistance, it’s the difference between having food on the table and going hungry.
The systemic impact is equally concerning. Fraud undermines trust in public assistance programs, leading to stricter regulations and more hurdles for legitimate beneficiaries. It also puts a strain on government assistance programs for everyone who depends on them, even those who haven’t had their EBT cards affected by fraud at all. For example, in October 2024 alone Oklahoma Human Services received 10,000 complaints of SNAP cards being depleted by fraudsters, which led to a 46% increase in help requests for a local food pantry. The psychological toll is equally severe, with victims reporting increased stress, anxiety, and feelings of helplessness.
And of course, taxpayers bear the burden of reimbursing stolen funds, creating a ripple effect that impacts the broader economy.
So what can be done?
A New Layer of Protection: Ellipse Verification Code (EVC)
To address this growing crisis, governments must adopt cutting-edge solutions like EVC. Here’s how it works: once implemented, EVC can equip EBT cards with a dynamic security code (dCVC/dCVV) that changes with each card-present transaction. So even if EBT card data is stolen, the dynamic code ensures it cannot be used for fraudulent online purchases since the security code will have changed multiple times by the time the criminal tries to use the card information.
This innovative technology combines robust security with a seamless user experience. Beneficiaries can continue using their cards without any added complexity, while fraudsters find themselves locked out. And since EVC works on EMV rails, any EBT card that can have an EMV chip can also have EVC.
Why EVC Is the Right Solution
Prevents Data Reuse
EVC renders stolen data useless, effectively eliminating the risk of counterfeit cards and unauthorized online transactions.
Seamless Integration
EVC can be implemented across existing payment infrastructures, ensuring a smooth transition without disrupting beneficiaries.
Cost-Effective
While fraud prevention is often viewed as an expense, EVC can generate long-term savings by reducing fraud-related losses and operational costs.
Enhances Trust in Assistance Programs
By demonstrating a commitment to protecting beneficiaries, EVC can restore confidence in public assistance systems and reduce stigma associated with their use.
The Call to Action: Governments Must Lead the Charge
To protect vulnerable families, state and federal governments need to prioritize EBT card security. While some progress has been made with issuing EMV chip technology in certain states, it’s time to go further. EVC represents the next evolution in fraud prevention, offering unparalleled security and peace of mind. Curbing EBT fraud is a win for everyone: the government agencies that reduce spending and win back consumer trust, the families who rely on the government assistance, and every tax-paying citizen.
EBT card fraud is a growing problem, but it’s not insurmountable. With EVC, we have a powerful tool to prevent fraudsters from exploiting EBT cards in online transactions and protect the most vulnerable. Let’s not wait for the problem to worsen—let’s act now.
Learn more about Ellipse Verification Code (EVC) and how it can transform EBT card security.
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