How card skimming is disproportionately impacting those most in need – Cancer on Security


When individuals who bank in the United States lose money because their payment card was swiped at an ATM, gas station, or grocery store point-of-sale terminal, they may experience problems or delays in recovering lost funds, but they will almost always be recovered from restored to their financial institution. However, one class of Americans — those who receive food assistance through federally-issued prepaid debit cards — are particularly vulnerable to losses from skimming scams and typically have little ability to do anything about it.

The California EBT card does not currently contain a chip. This silver square is a hologram.

In recent months, authorities in several US states have reported a rapid increase in skimming losses associated with individuals receiving Electronic Benefits Transfer (EBT) assistance, causing a Supplemental nutritional support program (SNAP) participants to pay for groceries with SNAP benefits.

When a participant uses a SNAP payment card at an authorized retail store, their SNAP EBT account will be charged to reimburse the store for the groceries purchased. EBT is used in all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam.

EBT cards work just like regular debit cards in that they can be used with a personal identification number (PIN) to pay for goods at participating stores and withdraw cash from an ATM.

However, EBT cards differ from debit cards, which are issued to most Americans, in two important ways. First, most states do not equip EBT cards with smart chip technology, which can make payment card cloning much more difficult and expensive for skimming thieves.

Unfortunately, it is no coincidence that all states reporting recent cheating spikes are associated with EBT accounts – including California, Connecticut, Maryland, Pennsylvania, Tennesseeand Virginia currently appear to issue chipless cards to their EBT recipients.

The Massachusetts SNAP Benefits Card is more like a library card than a payment card. Curiously, both rely on the same fundamentally insecure technology: the magnetic stripe, which stores cardholder data in plain text that can easily be copied.

In September, authorities in California arrested three men believed to be part of a skimming crew specifically targeting EBT cards and balances. The men allegedly installed deep-insert skimmers and stole PINs with tiny hidden cameras.

“The arrests were the result of a joint investigation by the Sheriff’s Office and Bank of America Corporate Security,” it said a story from September 2022 out The Sacramento Bee. “The investigation focused on illegal skimming, specifically the high-volume ATM withdrawal sequence at the beginning of each month when Electronic Benefits Transfer accounts are funded by California.”

Armed with a victim’s PIN and stolen card details, thieves can clone the card onto anything with a magnetic stripe and use it at ATMs to withdraw cash or as a means of payment at any store that accepts EBT cards.

Skimming equipment seized from three suspects arrested by Sacramento authorities in September. Image: Sacramento County Sheriff’s Office.

Although it may come as a shock that California – one of America’s wealthiest states – still treats EBT recipients as second-class citizens by issuing them chipless debit cards, California behaves like most other states in this respect.

More critical, however, is the second difference between SNAP cards and regular debit cards: recipients of SNAP benefits have little to no hope of getting their funds back if their EBT cards are copied by card-skimming devices and used for fraud.

That’s because under the SNAP program, federal laws prevent states from substituting federal funds for SNAP benefits. And although some of these EBT cards come with Visa or MasterCard logos, it is not up to these companies to replace funds in the event of fraud.

Victims are encouraged to report theft to both their state agency and local police, but many victims say they rarely receive updates on their cases from the police, and when they hear from the state, it’s usually the agency telling them that she has found no evidence of cheating.

Maryland’s EBT map.

This is acc Brenna Smitha reporter at The Baltimore Banner who recently wrote about it the case of a Maryland mother of three who lost nearly $3,000 in SNAP benefits because a skimmer was installed at a local 7-Eleven. Maryland [Department of Human Services] Spokesperson Katherine Morris told the banner there was evidence of “a nationwide EBT card cloning program.”

The woman portrayed in Smith’s story contacted every retailer where her EBT card was used to purchase thousands of dollars worth of baby formula. Two of these retailers agreed to share surveillance video footage of the people making the purchases at the exact timestamps provided in their EBT account history: the videos clearly showed it was the same scammer making both purchases with a cloned copy made with her EBT card.

Even after the officer assigned to the victim’s case confirmed that he found a skimmer at the 7-Eleven store she visited, her claim — which was denied — still smolders in appeals months later.

(Left) A video still showing a couple buying nearly $1,200 worth of baby food with SNAP benefits. (Right) A video still of a woman exiting the CVS in Seat Pleasant. Image: The Baltimore banner.

The Center for Law and Social Policy (CLOSURE) recently released Five ways governments can support EBT users at risk of skimming. CLASP says that while it’s true that states can’t use federal funds to replace benefits unless the loss is due to a “system failure,” states can use their own funds.

“This will ensure families don’t have to go without groceries, gas money or their rent for the month,” CLASP wrote.

That would help address the symptoms of card skimming, but not the root cause. Hardly anyone is proposing the obvious, which is to equip EBT cards with the same security technology afforded to virtually everyone else involved in the US banking system.

There are several reasons why most state-issued EBT cards do not contain chips. For starters, no one says they have to. Also, smart cards are a lot more expensive to produce compared to plain old magstripe cards, and many government aid programs are chronically underfunded. After all, there isn’t a vocal (or at least well-heeled) constituency that advocates for change.


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