Thursday, May 31, 2012

Food Stamp Program Gets Tough On Fraud

Cracking Down On EBT Cards Sold Illegally Online Or To Stores

Agriculture Under Secretary Kevin Concannon today announced new measures to further reduce fraud in USDA's Supplemental Nutrition Assistance Program (SNAP) as part of the Obama administration's ongoing Campaign to Cut Waste. 

New rules will help states examine client's excessive requests for replacement benefit cards. Some food stamp recipients have been selling their benefit EBT cards for cash either to stores, or on online, all of which are illegal. Current law lacks needed flexibility for States to contact households for information about requests for multiple replacements, which in some cases may indicate fraudulent activity, as the cards are sold and then a replacement requested from the state SNAP programs.

"There are many legitimate reasons for replacing cards and the vast majority of recipients follow the rules," said Concannon, Agriculture Under Secretary for Food, Nutrition and Consumer Services. "But we are concerned that a few bad actors are using replacement cards to exchange SNAP benefits for cash, commonly referred to as trafficking."

Trafficking is an illegal activity punishable by disqualification from the program, fines, and even criminal prosecution. Over the last 15 years, FNS has aggressively implemented a number of measures to reduce the prevalence of trafficking in SNAP from 4 percent down to 1 percent.

The proposed rule provides States the option to require SNAP recipients to make contact with the state when there have been an excessive number of requests for replacements in a year. The proposal lets States set the threshold for contact but stipulates that it be no fewer than four requests in the 12 month period prior to the requests. 

USDA continues to work with local, state and federal partners to root out fraud, waste and abuse in SNAP, also known as food stamps. Most recently, USDA sent letters to the CEOs of Craigslist, EBay, Facebook and Twitter to reiterate the need to help prevent the illegal sale or purchase of SNAP benefits on their websites. The proposed rule also codifies current policy that such attempted sales are trafficking violations.

Concannon also today released second quarter, fiscal year 2012 results of USDA work in fighting fraudulent activity in SNAP retail stores, tallying final actions to sanction or disqualify retailers violating program rules. In that quarter, USDA staff took final actions to:

Impose sanctions, through fines or temporary disqualifications, on more than 198 stores found violating program rules; and

Permanently disqualify over 366 stores for trafficking in SNAP benefits (i.e. exchanging SNAP benefits for cash).

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