The first time it happened to Courtney Abrams, hardly anyone believed her.
Someone had drained the more than $700 in cash aid and nearly $200 in food stamps from the electronic benefits transfer (EBT) card the 33-year-old single mother received from the state, just minutes after those monthly payments appeared in her account.
Abrams never got to spend a dime of it, though she hadn’t lost her card.
Abrams, a West Los Angeles College student, called the card company’s customer service line that day to dispute the mystery transactions. She got a replacement card from the county and filed a police report. It took a couple of weeks for money to be loaded onto her new card. She also changed the PIN.
That was last March. In September it happened again. This time it took a month to get her money back, she said.
In November it happened again. Now she changes her PIN every month, the night before she gets her benefits, hoping to outsmart the thieves.
“I was, like, maxing out credit cards, doing promise-to-pay, talking to my landlord, letting him know my money got stolen,” she said. “It was a lot of exposure … having to plead your case with these people in a situation that sounds kind of far-fetched.”
It’s not so far-fetched now: State and county officials say that a rash of thefts is wiping out the cash and food benefits from thousands of lower-income families’ electronic benefits cards in California and nationwide.
Millions gone
The thefts, which cost the state tens of millions of dollars to replace each year, have sent recipients scrambling to pay bills and household expenses, and flooding social services departments with reimbursement requests. The state proposes to upgrade the cards’ security features at a cost of $50 million in next year’s budget.
California uses EBT cards to deliver financial assistance for several programs, including CalFresh, which gives food aid to 2.8 million families a year, and CalWORKs, which gives cash to more than 300,000 families a year. Smaller programs include assistance grants to refugees and immigrant crime victims.
Lower-income Californians reported $29.7 million in cash welfare stolen and $4.7 million in food aid stolen in the 14 months from July 2021 through last September, the latest month for which statewide data was available, according to the Department of Social Services.
For CalWORKs, the theft amounted to less than $100,000 a month in mid-2021 and then rose to more than $4 million a month by last fall. The department is estimating an average of $6 million a month will be stolen this fiscal year, rising to $8 million a month in the year that begins in July, according to the California Department of Social Services budget documents.
What has been stolen in California so far amounts to a sliver of the total benefits California issued to all recipients — less than 1% of the cash benefits and less than a tenth of 1% of food aid.
Still, the amount of EBT theft has nearly doubled since 2019, budget documents state.
Minutes to lose
It’s not clear what prompted a nationwide spike in benefits theft last year. The consequences are particularly acute in California, which provides more generous cash grants than many other states. Advocates say pandemic-era boosts in food aid also meant bigger losses than usual from recipients’ accounts.
Often the theft occurs minutes after the benefits are transferred to their cards.
It takes much longer to be made whole. Several recipients told CalMatters it took weeks, or even more than a month, to get benefits reimbursed amid the rising theft.
The state social services department in 2013 instructed counties to replenish money to victims within 10 days of a theft report, but exceptions meant to catch fraud can slow that process.
For example, if an aid recipient reports more than one theft within six months, social workers must flag their next claim for investigation.
Many recipients say they have been victims of theft more than once in recent months. Giovanna Roman, a Ventura County mother and community college student, said it happened to her three months in a row last year. She now receives her benefits through direct deposit, she said.
A vulnerability
One reason safety-net benefits are vulnerable to electronic theft, advocates say, is that the cards have long lacked a security feature banks began putting on their credit and debit cards in late 2015: security chips.
A chipped card doesn’t come in contact with hidden, illegal “skimming” devices, which are designed to copy information from the card’s strip.
To make purchases or withdraw money, EBT card users must swipe the cards’ magnetic strips.
A state public service video demonstrates how thieves can install skimming devices onto card readers to steal card numbers from the cards’ magnetic strips, and the thieves use hidden cameras to capture the cardholders entering their PINs.
The thieves can then create counterfeit cards to access the funds.
