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Thousands Have Benefits Stolen Through Card Skimming Across New York

Katie Honan
The City

Lawyers for thousands of New Yorkers who had their public benefits stolen through automatic teller machine and credit-card “skimming” fraud are urging city and state officials to recoup people’s stolen money and upgrade to cards with better protections. 

Officials from the Legal Aid Society and the Empire Justice Center in Albany sent a letter Thursday to the commissioner and top officials at the state Office of Temporary and Disability Assistance (OTDA), asking for help for more than 2,200 clients who have had their benefits stolen in the first eight months of 2022. 

Fraudsters “skim” credit and debit card information by secretly installing a device on ATM readers that sends credit card numbers and pin numbers back to the thieves, the letter states. 

With that data, they create fake cards and drain accounts. 

People don’t know they’ve been victimized until they go to use their cards — and find most or all of their money gone. 

“The loss of SNAP and [cash] benefits is having a devastating impact on affected households,” the plaintiffs’ lawyers wrote in the letter, referring to the Supplemental Nutrition Assistance Program, often referred to as food stamps.

Most of the theft in the state has happened to people living in New York City, according to state officials — and lawyers with Legal Aid and the New York Legal Assistance Group said their clients are often given confusing advice on what to do.

For example, clients have been told by the city’s Human Resources Administration to report it to the police, only to have the police tell them they need a sealed letter from HRA to take a report, multiple lawyers told THE CITY.

An HRA official said the agency wasn’t aware of any sealed letter requirements and encouraged New Yorkers to report when benefits are taken through fraud and card skimming. 

An HRA official said the agency wasn’t aware of any sealed letter requirements and encouraged New Yorkers to report when benefits are taken through fraud and card skimming.

Changing The Code

More than $730,000 has been taken from clients this year through August, according to data provided to Legal Aid by OTDA, but the lawyers think more benefit recipients have lost money and not reported it.

“People are doing exactly what they’re supposed to — they report it to HRA, they report it to the police in some instances, and HRA has done investigations in some of the cases,” Anne Callagy, the director of the government benefits practice at Legal Aid, told THE CITY.

But the help usually stops there, as Callagy and officials noted that federal and state regulations prohibit paying back the benefits in most cases.

The U.S. Department of Agriculture, which oversees SNAP, prohibits replacing stolen benefits.

And a state statute also prohibits replacing stolen public assistance money, although OTDA is “exploring its options,” according to officials.

Callagy and other officials said the fraud comes at a time when inflation is raising the cost of food.

“People are in dire need,” she said. “Nobody seems to be able to change the policy.”

Lawyers and advocates have also called for benefits cards to be upgraded with a chip that could prevent this type of fraud — but that process is challenging, according to a spokesperson for OTDA.

“OTDA takes seriously any report of benefit theft and continues to work closely with local, state, and federal authorities to provide any information they require that will help bring perpetrators to justice,” agency spokesperson Anthony Farmer told THE CITY in a statement.

The state office is working with the USDA to find options to enhance the Electronic Benefit Transfer cards, he said.


Meanwhile, “EBT card users should remain vigilant for this type of theft by reviewing their account for suspicious activity, regularly changing their PIN, and by closely inspecting all retailer terminals for signs of tampering before swiping their card,” Farmer added.

A spokesperson for HRA said that the agency has fraud prevention services and a dedicated unit to investigate fraud and other issues with public benefits.

“Protecting our clients from any instances of fraud or misconduct when accessing vital social services is a top priority,” spokesperson Neha Sharma emailed THE CITY.

“In service of this mission, we have implemented various agency-wide safeguards, which include robust accountability and oversight mechanisms, fraud prevention resources and related outreach, and ensuring that any such instances are promptly investigated and addressed,” she added.

Sharma noted that HRA merely administers the benefits and cannot affect regulations or the cards themselves.

“I was in a panic”

In the meantime, some of the most vulnerable New Yorkers are seeing their only way to pay for food and other necessities siphoned away.

One Queens family, including a 16-year-old with disabilities, told Legal Aid they went grocery shopping on Oct. 6, and noted they had a $1,200 balance on their benefits card. When they returned two days later to the same store, they saw they had just $54 left.

They later found out that the money had been spent at two stores in Indiana.

Another woman, who’d moved with her 4-year-old daughter into a new apartment after living in a shelter, had her $1,350 furniture allowance drained within a day of it being issued — forcing them to sleep on the floor, according to Legal Aid.

While the issue is more widespread in New York City, people around the state have had their benefits stolen.

One woman in Nassau County, who asked to be identified by her initials, I.P., went to her local grocery store on Nov. 19 to buy food for her children, who were sick.

That’s when she found out she had a balance of zero dollars – from the $2,000 she remembered the last time she used the card, she told THE CITY.

“I was in a panic because the money was gone,” I.P. said, through a Spanish translator.

She recouped some money after advocates at The Empire Justice Center intervened — but it was a fraction of what had been stolen, she said.

“I couldn’t buy anything,” I.P. said.

Calagy and other officials noted that the fraud comes as inflation is raising the cost of food.

“People are in dire need,” she said. “Nobody seems to be able to change the policy.”

Originally published in The City on December 5, 2022

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