In 2022, LexisNexis Risk Solutions, a consumer reporting agency, took a deep dive into fraud committed against SNAP benefits agencies, and the fraud rates they found were staggering. The study looked at SNAP fraud data from 23 states, the U.S.V.I., and the District of Columbia. The study concluded that the lack of fraud mitigation methods involving multi-layered solutions and integrated fraud solutions, like those available from private sector data companies, costs taxpayers hundreds of millions of dollars. The lack of fraud prevention for SNAP benefits literally takes food out of the mouths of the people that need it the most.
- Every $1 of benefits lost through fraud costs SNAP agencies $3.72. This includes additional costs related to internal labor (for detection, investigation, reporting) and administrative tasks (for data exchanges, etc.). These attacks are primarily due to identity fraud, eligibility, account takeover, and trafficking from fraudulent Electronic Benefit Transfer (EBT) transactions.
- The cost of fraud is higher for agencies that accept more applications from mobile and web platforms. Mobile transactions represent an average of 15% across all channels including in-person, online, and call centers. Agencies that have more than 20% of mobile channel submissions experienced an even greater loss – $4.40 for every $1 of benefits lost through fraud.
- Identity-related fraud is a leading contributor to SNAP agency fraud losses and is present in 31% of reported cases. In addition to identity theft, 25% of fraud is from account takeovers, 24% from eligibility fraud, and 20% from trafficking of benefits.
- Few agencies have fully implemented the USDA Food and Nutrition Service (FNS) SNAP Fraud Framework, though over half have partially done so.
- The use of fraud mitigation solutions is limited, particularly those that assess digital identity attributes to address challenges with online and mobile channel fraud detection challenges.
The study looked at SNAP fraud data from 23 states, the U.S.V.I., and the District of Columbia. Those states are Alaska, Arizona, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Montana, Pennsylvania, South Carolina, Texas, Utah, and Vermont.
The study also looked at a number of counties in ten states (California, Colorado, Minnesota, New York, New Jersey, North Carolina, North Dakota, Ohio, Virginia, and Wisconsin).
- California: San Bernardino, San Francisco
- New York: Albany, Bronx, Hudson, Kings, Onondaga
- Colorado: Arapahoe, Boulder, Denver, Douglas.
- Minnesota: Anoka, Dakota, Hennepin, Ramsey, St. Louis.
- New Jersey: Bergen, Morris
- North Carolina: Durham, Onslow, Pender, Wake
- North Dakota: Cass, Grand Forks
- Ohio: Cuyahoga, Hamilton
- Virginia: Arlington, Fairfax, Henrico, Richmond
- Wisconsin: Kenosha, Milwaukee
- Unconnected: Alameda, Buncombe, Burleigh, Burlington, Butte, Clermont, Dane, El Paso, Somerset, Suffolk, Summit, Ward, Warren, Williams
Eric J. Ellman is Senior Vice President for Public Policy and Legal Affairs at the Consumer Data Industry Association (CDIA) in Washington, DC. He also served for eight months as Interim President and CEO of the Association. More