MONTGOMERY, Ala. — The Alabama Legislature’s Contract Review Committee approved a $6 million contract Thursday for the Department of Human Resources designed to help the agency combat rising instances of EBT theft, with close to 14,000 Alabama families affected by EBT theft in November alone.
“This fraud is much more sophisticated than client fraud, and it’s rampant, it’s rampant across the nation, and Alabama is one of the hardest hit states,” said DHR attorney Jennifer Bush to the committee, comprised of both Alabama senators and representatives, at the Alabama State House.
“So far in the month of November, we’ve paid out almost $5 million now in replacement benefits. We’ve processed over 13,000 claims where it’s stolen.”
Nearly 800,000 Alabamians receive food assistance through EBT, which is funded through the federal Supplemental Nutrition Assistance Program, or SNAP. Alabama recipients typically receive around $2 per person, per meal, and must adhere to strict eligibility requirements that include caps on monthly income and savings.
Bush explained that the rising instances of EBT fraud were not committed by SNAP recipients, but rather, those stealing from them, and by sophisticated methods such as card skimming, card cloning or phishing methods.
In regards to card skimming and cloning, which involves the illegal installation of devices on point-of-sale terminals to steal EBT card information, Bush said that DHR is encouraging retailers to perform daily checks on terminals to identify and report such devices.
Other instances of EBT theft occur after data breaches, where SNAP recipients’ personal information leaks online.
“We’ve read about stolen Social Security numbers, dates of birth and all that, they’re taking that and bumping that up against the EBT system, which will get them in and then they’re stealing peoples’ pin numbers before they can use their benefits on the card,” Bush said. “So it is a huge problem.”
The $6 million contract, which will be paid for with an even split of federal and state funds, is for a comprehensive fraud mitigation initiative, which DHR Commissioner Nancy Buckner explained will include installing chips on EBT cards to help improve tracking transactions, the ability for EBT card holders to deactivate their cards and other fraud mitigation methods. The contract will be paid out to the New Jersey-based Conduent State and Local Solutions Inc., which provides services for state, local and federal government entities.
However, with the contract term being six months, Buckner said her agency has struggled, and will likely continue to struggle, to make SNAP recipients that have been victims of theft whole again.
“We’re having trouble keeping up replacing benefits, and we can only replace it for theft two times a year, so there are going to be a lot of folks calling if we don’t get a lid on this and shut it down,” Buckner said.
Buckner went on to explain that her agency had worked in tandem with the U.S. Secret Service earlier this year to better identify the methods of EBT theft that were being executed in the state.
“… A lot of money is going out of state; it could either be going to organized crime or it could be going to Yemen or another foreign country,” she said.
Instances of EBT theft have skyrocketed across the country, with EBT theft reports jumping from 105,935 during the second quarter of 2024 to 287,661 in the third quarter, resulting in the federal government spending more than $53 million to replace the stolen funds.
“This is also a 50-state-issue that’s going on right now,” said Sen. Dan Roberts, R-Mountain Brook, who chairs the committee.” Hopefully this (contract) is going to help.”
The $6 million contract
After the meeting, Buckner told Alabama Daily News that EBT theft “has picked up a lot recently,” and during a particularly difficult time in the year for lower-income earners.
“It’s affected in the month of November a little over 13,000, almost 14,000 families, and so we’re working really hard to get their benefits replaced,” she told ADN. “These people need food for their families; they’re economically disadvantaged or they wouldn’t be on SNAP to start with, so it’s very hard on them this time of the year too.”
Throughout the meeting, committee member and House Pro Tem Chris Pringle, R-Mobile, noted how frequently he personally observed what he believed to be instances of EBT fraud, telling ADN that he sees it “fairly often.”
While telling ADN that stopping all EBT fraud was near impossible, Pringle did express optimism that the $6 million contract could help curb a significant portion of it.
“It’s almost impossible to stop the fraud,” Pringle told ADN. “What you can do is go back later and, if they chip (the EBT cards), I think they might be able to go back and trace stuff. Hopefully we’ll crack down on it.”
