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Lawmakers Press Agencies on EBT Skimming and Whether New York Can Switch to Chip Cards
Summary
Lawmakers and advocates urged immediate action after testimony that hundreds of millions in SNAP benefits have been stolen; agencies said chip-card rollout could cost up to $40 million and recommended interim fraud-reduction measures, including ‘‘lock and block’’ tools and outreach.
Lawmakers pressed Office of Temporary and Disability Assistance (OTDA) officials at the joint hearing about a rapid rise in Electronic Benefit Transfer (EBT) skimming and asked whether the state can switch to chip-enabled EBT cards to reduce fraud.
OTDA Acting Commissioner Barbara Gwynn told the panel the state has seen a large number of households affected by theft and has rolled out emergency outreach including a ‘‘lock and block’’ option that lets recipients temporarily block transactions while they obtain a replacement card. Gwynn said the agency also texted SNAP households to raise awareness of the feature.
Senators and assembly members pressed for a faster timeline to move to chip-enabled cards. OTDA told lawmakers that early estimates for a statewide chip rollout were as high as $40 million in first-year costs; those costs reflect back-end system changes to allow chip processing, distribution of new cards to roughly 1.5 million cardholders and vendor transition costs. Officials said they are continuing to seek lower-cost implementation approaches and have opened procurements to better define final costs.
Lawmakers and advocates urged the state to create a victim reimbursement program. OTDA said the federal government had previously allowed states to reimburse stolen SNAP benefits but recently reversed that policy, making state-level reimbursement the only option for victims going forward. In the hearing several legislators urged a state fund to cover stolen benefits while the chip transition proceeds.
OTDA also described short-term fraud-mitigation steps it is using while it evaluates chip card costs: expanded outreach about ‘‘lock and block,’’ outreach text campaigns to SNAP households, pilot options for telephone-based blocking and vendor procurement to explore chip alternatives that might lower implementation costs.
Lawmakers asked whether other state agencies had experience with chip cards; several witnesses noted the Department of Labor’s Conduent Way2Go debit cards already use chip technology, and legislators asked OTDA why the agency moved to a different vendor (FIS) rather than a vendor already using chip cards. OTDA said the vendor change resulted from a routine procurement process and not a policy judgment about chip card capability.
Ending: Lawmakers left the hearing urging the governor and agencies to prioritize both a chip-card transition and a short-term reimbursement mechanism; officials said the state will continue procurement work to tighten the $40 million estimate and expand outreach to help households protect benefits now.
