The U. S. food stamp program is facing serious fraud and corruption issues, which are partly attributed to outdated technology. The reliance on old systems for loading electronic benefit transfer (EBT) cards makes it easy for fraudsters to exploit and steal benefits.
• The government spends nearly $100 billion annually on the food stamp program, supporting about 41.7 million people.
• From October 2022 to December 2024, $322 million in benefits were replaced due to fraud, primarily card skimming and cloning, with an additional $233 million expected over the next two years.
• The USDA's outdated magnetic stripe card system, used for EBT, is vulnerable to fraud compared to modern chip technology used in credit and debit cards.
• A report from the USDA Inspector General emphasizes that adopting chip technology could significantly reduce fraud.
• Congress mandated the USDA to update the EBT system, but this has not been implemented, leading to continuous financial losses from fraud.
• States like New York, California, and Maryland have reported the highest theft amounts.
• The USDA has initiated a special Fraud Framework program to tackle fraud, but incidents of fraud, including significant cases involving USDA employees, continue.
The ongoing reliance on outdated technology in the food stamp program contributes to rampant fraud, resulting in substantial financial losses for taxpayers. Modernizing the system with chip technology is essential to protecting benefits and reducing theft.
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