Many low-income households across the country depend on Electronic Benefits Transfers (“EBT”) to afford nutritious food and day-to-day necessities.[1] Participants of the Supplemental Nutrition Assistance Program (“SNAP”), also known as the Food Stamp Program,[2] and other federal cash assistance programs can access monthly deposited funds (“benefits”) using their EBT cards.[3]

Thieves continue to target the most vulnerable Americans, including families, seniors, and disabled Americans,[4] by stealing benefits through fraudulent methods like card skimming.[5] Card skimming involves the use of an electronic device to “access, read, scan, obtain, memorize, or store” personal information on an EBT card,[6] including payment information[7] and PINs.[8] These devices can be attached quickly and discretely at store check-outs by devious employees or customers.[9] Card skimming also includes the use of illegal, malicious code in a website to collect personal information on an EBT card.[10]

Once skimmed and stolen, EBT card benefits cannot be restored, leaving many households stranded.[11] Since 2021, EBT thefts have increased nearly tenfold in Maryland.[12] Households reported over $1 million in stolen SNAP benefits in 2022.[13] Between October 2022 and February 2023, over 2,300 Maryland families reported losing benefits to EBT fraud.[14] Incidents like these continue to increase nationwide.[15]

In December 2022, President Biden signed the Consolidated Appropriations Act of 2023 (“the Act”),[16] a $1.7 trillion omnibus spending bill that includes a federal mandate requiring states to submit plans to make EBT cards more secure and use federal funds totaling $154 billion to reimburse SNAP benefits stolen by EBT fraud between October 2022 to September 2024.[17] Before this mandate, only certain jurisdictions, namely D.C. and California,[18] used state and local funds to reimburse benefits to victims of EBT fraud.[19]

Maryland was the first state to submit a plan and receive approval from the U.S. Department of Agriculture’s Food, Nutrition, and Consumer Services.[20] Maryland was also the first state to use over $2.5 million in federal funds to reimburse SNAP benefits lost to EBT fraud in 2023.[21]

To complement the Omnibus, Maryland legislators passed the Prevent Electronic Benefits Theft Act of 2023 (“S. 2”).[22] Under S. 2, within ten days after a household reports stolen benefits, the Department of Human Services (“DHS”) must provide to a household: (1) written notice of its decision to restore benefits, the amount of benefits to be restored, and the household’s right to a hearing and method of the hearing; (2) restored benefits, if any, equivalent to the amount lost to EBT theft; and (3) a new EBT card.[23] DHS may not require a police report, though information can aid authorities.[24] DHS may also not limit the number of months a household can receive lost benefits.[25]

S. 2 also increases the reimbursement eligibility period by twenty-one months, beyond the original October 1, 2022 limit.[26] For benefits stolen between January 1, 2021 and October 1, 2022, after confirmation of EBT theft, DHS had discretion to restore benefits by September 1, 2023, and then must support “innovative practices required to support beneficiaries” between reporting and restoration of benefits lost.[27]

Should a household disagree with the amount of benefits restored or lack thereof, the household may request a hearing within ninety days after the date of DHS’s determination.[28] While the hearing is pending, DHS must restore the benefits claimed by the household.[29] If the determination is affirmed, DHS may recover any improperly restored benefits by reducing the household’s benefit by up to five percent of the household’s monthly fund or some amount under ten dollars.[30]

In addition to reimbursement requirements, S. 2 contains requirements for the procurement process for electronic benefits distribution and DHS’s reporting of EBT theft-related information to the General Assembly.[31] S. 2 also requires DHS to work with vendors, like Conduent, a technology partner who issues EBT benefits,[32] to reduce EBT theft by implementing safeguards to Maryland’s EBT system[33] such as fraud alerts and an online card locking feature.[34]

S. 2 represents a state and national legislative and monetary attempt to address EBT fraud.[35] Although a “positive step” for victims,[36] neither S. 2 nor the Act address EBT thefts before October 2022, and SNAP reimbursements do not apply to other cash assistance programs.[37] Reimbursements are also a temporary solution; Maryland and other SNAP states need to actively improve security measures to combat escalating criminal technology use and its catastrophic consequences.

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Jessica Kweon is a second-year law student at the University of Baltimore School of Law and a first-year staff editor for Law Forum. She received her Bachelor of Arts in Psychology and minors in Biology and Writing from the University of Maryland, Baltimore County. Jessica has interned for the Honorable Judge Douglas R. M. Nazarian of the Appellate Court of Maryland, the Honorable Judge Mary M. Kramer of the Circuit Court for Howard County, and the Honorable Judge Catherine Chen of the District Court for Baltimore City. In law school, Jessica is also a member of the Jeffrey G. Miller National Environmental Law Moot Court team and Vice President of the Asian Pacific American Law Student Association.

[1] Mallory Sofastaii, Lawmakers Consider Bills Addressing Huge Spike in Stolen SNAP & Cash Assistance, WMAR-2 News Balt. (Feb. 21, 2023, 12:50 P.M.),https://www.wmar2news.com/matterformallory/lawmakers-consider-bills-addressing-huge-spike-in-stolen-snap-cash-assistance.

[2] Elaine S. Povich, Maryland, Other States Scramble to Replace Ripped-off SNAP Benefits, Md. Matters (Feb. 13, 2023), https://www.marylandmatters.org/2023/02/13/maryland-other-states-scramble-to-replace-ripped-off-snap-benefits/.

[3] Sofastaii, supra note 1.

[4] Breanna Smith & Brenda Wintrode, Congress Requires States to Reissue Stolen Food Benefits as Part of Spending Bill, Balt. Banner (Dec. 27, 2022, 6:57 A.M.), https://www.thebaltimorebanner.com/politics-power/national-politics/snap-maryland-omnibus-bill-theft-2PNJFCGZ6BBGFORKRJWRMF5LLU/.

[5] Povich, supra note 2; Alejandro Alvarez, Maryland Offers Reimbursements to Victims of SNAP Benefits Fraud, Md. Matters (Mar. 28, 2023), https://www.marylandmatters.org/2023/03/28/maryland-offers-reimbursements-to-victims-of-snap-benefits-fraud/.

[6] Prevent Electronic Benefits Theft Act of 2023, ch. 172, 2023 Md. Laws. See S. 2, 2023 Gen. Assemb., 445^th Sess. (Md. 2023); see H. D. 502, 2023 Gen. Assem., 445^th Sess. (Md. 2023).

[7] Alvarez, supra note 5.

[8] Povich, supra note 2.

[9] Id.

[10] Prevent Electronic Benefits Theft Act of 2023, supra note 6.

[11] Alvarez, supra note 5.

[12] Povich, supra note 2.

[13] Id.

[14] Alvarez, supra note 5.

[15] Povich, supra note 2.

[16] Tim English, Acting Assoc. Adm’r of Supplemental Nutrition Assistance Program, Replacement of SNAP Benefits in the Consolidated Appropriations Act of 2023, USDA (Jan. 31, 2023), https://www.fns.usda.gov/snap/replacement-snap-benefits-consolidated-appropriations-act-2023; see also Consolidated Appropriations Act, 2023, H.R. Con. Res. 2617, 117th Cong. (2021-2022).

[17] Povich, supra note 2; see also Smith & Wintrode, supra note 4.

[18] Sofastaii, supra note 1.

[19] Povich, supra note 2; see also Dan Belson, Maryland Is Approved to Reimburse SNAP Participants Who Were Victims of EBT Fraud, Balt. Sun. (Feb. 27, 2023, 11:46 P.M.),https://www.baltimoresun.com/maryland/bs-md-snap-fraud-plan-approved-20230228-6ifkcu7qvjdoda3hwfhgodbfde-story.html.

[20] Belson, supra note 19.

[21] Belson, supra note 19; see also The Off. of Governor Wes Moore, Governor Wes Moore Announces Expansion of Electronic Benefits Transfer Card Fraud Reimbursements, Maryland.gov (Apr. 26, 2023), https://governor.maryland.gov/news/press/pages/Governor-Wes-Moore-Announces-Expansion-of-Electronic-Benefits-Transfer-Card-Fraud-Reimbursements.aspx.

[22] Prevent Electronic Benefits Theft Act of 2023, supra note 6.

[23] Id.

[24] Alvarez, supra note 5.

[25] Prevent Electronic Benefits Theft Act of 2023, supra note 6.

[26] The Off. of Governor Wes Moore, supra note 21.

[27] Prevent Electronic Benefits Theft Act of 2023, supra note 6.

[28] Id.

[29] Id.

[30] Id.

[31] Id.

[32] Sofastaii, supra note 1; Alvarez, supra note 5.

[33] Prevent Electronic Benefits Theft Act of 2023, supra note 6.

[34] Alvarez, supra note 5.

[35] Id.

[36] Povich, supra note 2.

[37] Smith & Wintrode, supra note 4.