Food Benefits Vanish Overnight, But This Simple Tech Upgrade Could Save Them
New study shows skimming hits the poorest households hardest, stealing millions in SNAP benefits from Americans in need
Electronic Benefits Transfer (EBT) cards are supposed to make it easy for low-income Americans to pay for groceries or withdraw cash. Instead, a wave of EBT card skimming has turned them into a jackpot for thieves and fueled a broader pattern of SNAP benefits fraud. A U.S. Justice Department case in California logged nearly $40 million in SNAP funds stolen between August 2022 and June 2023. In a 2024 survey of 1,700 EBT-fraud victims by fintech firm Propel, 53 percent said they experienced food insecurity after an attack and 44 percent had to borrow money or take on debt - classic fallout from food stamp theft.
Those grim numbers frame a new peer-reviewed study by Iowa State University researcher Anthony Vespa, “Protecting the Poor: A Deep Dive into EBT Skimming and Solutions to Combat It." Vespa’s 100-page analysis dissects why EBT cards, unlike most consumer credit and debit cards, still rely on 1960s-era magnetic-stripe (magstripe) technology and shows how that single design choice invites large-scale fraud.
Inside a modern EBT heist
Drawing on FBI forensics and KrebsOnSecurity case files, Vespa rebuilt a full skimming rig in the lab. It consisted of a 3D-printed ATM overlay that acts as a magnetic stripe skimmer with a hidden pinhole camera and on-board flash storage. In tests, the device captured card data and PINs in seconds. Criminals typically return days later, harvest the hardware, and encode blank plastic cards that work anywhere EBT is accepted. This is the process of SNAP card cloning that lets crooks shop or withdraw cash far from the victim’s state.
State data underline the scale: Washington’s Department of Social and Health Services says two-thirds of its 22,000 recorded fraudulent EBT transactions since 2022 occurred out of state, proof that cloned cards travel fast.
Magstripe cards are the Achilles heel
Why are EBT cards so easy to copy? Magstripes store the full card number, expiration date and service code in plain text across two tracks. It's information that can be written to any $0.10 blank card. By contrast, chip-enabled EMV cards - or chip EBT cards - generate one-time cryptographic tokens that are useless if intercepted. Visa reports show chip adoption cut U.S. in-store counterfeit fraud by 76 percent between 2015 and 2018.
Yet few U.S. state currently issues chip EBT cards, and federal rules still offer no automatic reimbursement when skimmers drain benefits.
Low-cost defenses states can deploy now
Vespa’s experiments surface three immediate, affordable EBT fraud prevention controls:
- Blind the cameras. A simple ring of infrared LEDs around an ATM or point-of-sale keypad washes out covert pinhole cameras day or night. This denies thieves half the data they need.
- Geo-lock the card. Payment gateways can compare the IP address of any transaction, online or in store, against a beneficiary’s home state or even ZIP code. This step instantly declines out-of-area charges and blocks traffic that threat-intelligence feeds flag as proxy or VPN abuse.
- Detect fallback abuse. Requiring three failed chip reads before a magstripe swipe and logging every incident thwarts gangs that deliberately damage chip slots to force a magnetic fallback on newly upgraded terminals.
Washington analysts estimate that a robust geo-lock alone would have stopped about 66 percent of its recorded fraud.
A roadmap to EMV chips and real reimbursement
Long term, Vespa argues, the only durable fix is to phase out magstripes entirely. Mastercard has already announced it will stop putting stripes on consumer credit cards by 2030. SNAP administrators could beat that deadline by bulk-ordering dual-interface EMV cards. Then, they need to distribute them as a monthly benefits refresh. Because SNAP balances reset every 30 days, a statewide migration could conclude within a single fiscal year, slashing clone-and-drain attacks almost overnight.
Momentum is finally building on Capitol Hill. A bipartisan bill introduced in March 2025 would require the U.S. Department of Agriculture to issue chip-and-PIN EBT cards and reimburse victims retroactively. Until that mandate passes, Vespa’s playbook - blind the cameras, lock the geography, tighten fallback rules - offers states and retailers a practical shield. For hundreds of thousands of vulnerable families, those guardrails could spell the difference between a stocked pantry and an empty one this holiday season.
