SACRAMENTO, Calif. — Theft involving electronic benefits transfer cards, also known as EBT cards, is a major problem in California.
Each month, the state deposits money on these EBT cards for recipients who qualify for food and cash assistance programs. The program is run by the California Department of Social Services. Taxpayers are on the hook to reimburse stolen benefits.
According to CalMatters, California was losing about $10 million taxpayer dollars a month to EBT theft in 2023. Benefits were often repeatedly stolen.
In 2023 alone, Sacramento County reimbursed more than $12 million to people who had their EBT benefits stolen.
“Seven locations had nearly $200,000 withdrawn fraudulently in just January 2024,” said Sacramento County Sheriff's Office Detective Sean Smith.
He points out organized crime rings are the ones cashing in on EBT theft.
"We see dozens and dozens of reports come in, and it's all tied back to skimming,” said Smith.
Skimming is the most common type of theft in Sacramento County. It's when someone inserts a device at a grocery store, gas station or bank, capturing a card holders' information.
Several ABC10 viewers reached out to the 'To the Point' team asking why the state hasn't implemented chip and tap technology with EBT cards. We asked the California Department of Social Services.
CDSS says federal regulations direct states to use EBT cards with magnetic stripes only. In a statement to ABC10, the department said, “...The federal EBT system was designed with fixed requirements that limited card technology to only conduct magnetic stripe transactions.”
Which means federal intervention is needed to change the EBT card system.
The department says the second reason is they would have to make significant changes to the current EBT system infrastructure, adding that EBT transactions are processed differently than commercial credit and bank cards. Without the back end technological upgrades, “a transaction using a chip/tap EBT card would fail.”
No states currently issue EBT cards with chips. California is working to be the first to update restrictions and develop chip and tap technology, a $50 million effort.
The department tells AB10 chip and tap card implementation is expected in summer 2024.
California isn't the only state dealing with EBT theft. U.S. Senator Ron Wyden from Oregon and other lawmakers recently introduced a bipartisan bill that, if passed, will require new EBT cards nationwide to include chips after two years. All older cards would need to be reissued with chips within five years. The United States Department of Agriculture would be directed to provide funding to support states making the transition.
WATCH MORE ON ABC10: Millions of your taxpayer dollars stolen from EBT cards | What we know
