Fraud Surges in SNAP - Over One-Third of Agencies Report Spike in Identity Theft and EBT Skimming, Especially Among Multi-Program Systems

ATLANTA, Oct. 22, 2024 /PRNewswire/ -- LexisNexis? Risk Solutions today released its third annual LexisNexis? Risk Solutions True Cost of Fraud? Study for Supplemental Nutrition Assistance Program (SNAP) Agencies and Integrated Eligibility Systems (IES). This authoritative study reveals the level and impact of fraud, including challenges, volume, and cost, as well as resources that SNAP and IES agencies utilize to detect and prevent fraud. In addition to analyzing the cost of fraud, the study explores the time and resources expended by SNAP investigators to prevent attacks and mitigate fraud and analyzes current fraud trends impacting these critical government benefits.

The 2024 study features a broad scope of integrated eligibility systems (IES), including:

• Supplemental Nutrition Assistance Program (SNAP),

• Center for Medicaid Services (CMS),

• Special Supplemental Nutrition Program for Women, Infants and Children (WIC),

• Temporary Assistance for Needy Families (TANF), and

• Low Income Home Energy Assistance Program (LIHEAP).

The 2024 study was expanded to focus on SNAP agencies' application processing time (APT) and payment error rates (PER) and the downstream impacts to beneficiary and case worker experience. The study also examined the degree to which SNAP agencies have implemented operational modernization features to support fraud detection efficiencies while minimizing delays and negative impacts to program beneficiaries and agency staff.

Key Findings:

• Rising Fraud Costs: SNAP agencies are facing increasing costs as fraud continues to grow, particularly through EBT skimming and account takeovers. Agencies impacted by these types of fraud report losing an average of $4.48 for every $1 of benefits lost—higher than the overall fraud cost of $3.93 per $1 lost.

• System Integration Adds Complexity: The expansion of IES across Human Services programs has increased fraud risks. With more access points for bad actors, fraud costs have risen to $4.04 per $1 lost through fraud, up from $3.85 last year. While IES enables better data sharing, it has not fully mitigated the complexities of fraud detection and prevention.

• Delays Impacting Staff and Beneficiaries: Outdated systems, manual processes, and resource limitations contribute to application processing delays for SNAP agencies. These delays negatively affect both the caseworker experience and the speed at which benefits reach those in need. Major challenges include the inability to quickly verify eligibility and identity data, leading to processing backlogs and increased worker stress.

• Modernization and Fraud Detection are Critical: Agencies struggle to combat fraud without hindering the beneficiary experience. Malicious bots, synthetic identities, and challenges in tracking transaction sources are absorbing significant resources. Fraud detection solutions remain underused at the application stage, with most agencies focusing on post-issuance prevention. However, agencies that integrate modernization with early-stage fraud detection realizing improvements in processing times, reduced fraud costs, and enhanced experiences for both workers and beneficiaries.