USDA Expands Safeguards for SNAP Benefits with Pilot Targeting Out-of-State Fraud

WASHINGTON, Nov. 18, 2024 – The U.S. Department of Agriculture’s Food and Nutrition Service is expanding its fraud prevention efforts with a pilot program designed to reduce out-of-state benefit theft in the Supplemental Nutrition Assistance Program, also known as SNAP. While the vast majority of SNAP benefits are used as intended to provide critical nutrition support to families in need, USDA is committed to rooting out all program fraud, including stolen benefits.

Data shows that benefit theft most often occurs out of state. Currently, participants can use their SNAP benefits in any state, at any time. The pilot will automatically block SNAP transactions in states where participants are unlikely to be shopping but empower participants to activate their card for out-of-state use when needed. This will maintain critical access to SNAP benefits while enhancing security.

“When SNAP participants are victims of fraud, it means missed meals and financial strain for SNAP families,” said USDA Food, Nutrition, and Consumer Services Deputy Under Secretary Cindy Long. “This pilot program is one of many ways USDA is working diligently and innovatively to empower participants with stronger protections so they can use their benefits safely and without interruption.”

The pilot builds on USDA’s ongoing commitment, in collaboration with its state agency partners, to modernize and safeguard the SNAP Electronic Benefit Transfer system that more than 42 million Americans with low-income rely on. As part of that effort, Agriculture Secretary Tom Vilsack issued a letter encouraging all governors to invest in SNAP EBT cards with chip technology for their states. “SNAP cardholders can and should be afforded the same preventative protections that other cardholders are afforded under credit and debit industry standards,” Vilsack noted. “The industry shift toward chip cards has proven an effective method to safeguard card usage from theft and fraud.”

Though transitioning to chip cards is a complex process, the August 2024 release of new technical specifications for chip and contactless (tap-to-pay) EBT transactions paved the way for progress, and Food and Nutrition Service will continue to provide substantial support for state agencies as they move forward.

Other ongoing initiatives to strengthen protections for SNAP benefits include but are not limited to:

• Mobile Payment Pilots: FNS is working with four states to launch mobile payment pilots, testing how SNAP participants can use their mobile devices to pay for food.
• Fraud Framework Grants: FNS provides annual grants to state agencies to support state agency efforts to improve and expand recipient fraud prevention, detection, and investigation efforts using the procedures, ideas and practices outlined in the SNAP Fraud Framework. In September 2024, FNS awarded nearly $5 million in SNAP Fraud Framework grants.
• Updated Regulatory Standards: FNS is working on recommended advancements to federal regulations related to EBT card security measures, incorporating input from a series of roundtable sessions the agency hosted with states and other relevant parties.
• Enhanced Transaction Tracking: In August 2024, the agency awarded a contract to support the development of an FNS Gateway Access Terminal, which will provide enhanced alerts to better detect and fight fraud.

While all these efforts and more are underway, USDA continues to support states in helping SNAP participants whose benefits have been stolen through card skimming and other fraud. Through the Consolidated Appropriations Act of 2023, Congress authorized the use of federal funds for states to replace stolen SNAP benefits. This authority is set to expire on Dec. 20, 2024.

FNS is currently working with states that expressed interest in the pilot on steps forward. However, the agency will not be announcing which states are participating in the pilot to avoid providing advance notice to potential bad actors.

USDA’s Food and Nutrition Service works to end hunger and improve food and nutrition security through a suite of 16 nutrition assistance programs, such as the school breakfast and lunch programs, WIC and SNAP. Together, these programs serve 1 in 4 Americans over the course of a year, promoting consistent and equitable access to healthy, safe, and affordable food essential to optimal health and well-being. FNS also provides science-based nutrition recommendations through the co-development of the Dietary Guidelines for Americans. FNS’s report, “Leveraging the White House Conference to Promote and Elevate Nutrition Security: The Role of the USDA Food and Nutrition Service,” highlights ways the agency will support the Biden-Harris Administration’s National Strategy, released in conjunction with the historic White House Conference on Hunger, Nutrition, and Health in September 2022. To learn more about FNS, visit www.fns.usda.gov and follow @USDANutrition.

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