Fraud experts claim that the implemented technology is outdated and that social benefit theft will remain a problem
The state of California has begun transitioning to chip-enabled EBT cards in an attempt to curb the theft of social benefits, but fraud investigators warn that this measure will not be enough to stop criminals. Despite a $76.5 million investment in system upgrades, experts claim that the technology used is already outdated and that criminals are years ahead of the implemented security measures.
Since 2023, San Diego County has reimbursed $34.6 million to families affected by theft of their social benefits. However, investigators state that the actual amount stolen is much higher, as the state only tracks reimbursed money and does not consider other losses such as suspicious withdrawals, unreported fraud, or denied claims.
Organized Crime Behind Benefit Theft
Recent investigations have revealed that transnational criminal networks are behind the looting of EBT accounts in California. In San Diego, the U.S. Attorney’s Office prosecuted seven foreign nationals (six Romanians and one Italian) who stole $181 million through fraudulent ATM withdrawals. Additionally, the FBI confirmed that European criminal organizations continue to exploit system vulnerabilities.
Investigators claim that California has taken too long to implement chip security and that the decision to keep the magnetic stripe on the cards leaves the door open to fraud. They argue that the state should have required merchants to update their payment systems years ago to eliminate this vulnerability.
Which Merchants Already Accept the New Chip-Enabled EBT Cards?
Despite the implementation of these new cards, the state has not provided a list of merchants that have already updated their systems to accept them. Investigators argue that as long as payment systems are not modernized in all establishments, beneficiaries will remain exposed to the theft of their funds.
Greg Mahony and Shawn Ferris, members of the California Welfare Fraud Investigators Association, claim that the issue is not only about card security but also the lack of control over who receives them. Currently, no in-person meeting or identification is required to apply for an EBT card, making it easier for criminals to access the system.
The Impact on Beneficiaries
For the 3.2 million Californians who rely on these benefits, any disruption in accessing their funds can be devastating. NBC 7 Investigates spoke with an EBT theft victim in San Diego, who reported that they were left with only $34 in their account after the fraud.
Meanwhile, the California Department of Social Services has avoided directly responding to criticism, merely stating that it «takes the issue of benefit theft seriously.» However, fraud investigators claim that the state continues to ignore the real scale of the problem and that the measures implemented are not enough to stop the massive theft of social assistance.