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Families are losing food and cash assistance to thieves; state says it’s unable to replace benefits

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Posted at 6:00 AM, May 24, 2022
and last updated 2022-05-24 07:16:50-04

BALTIMORE — Families in need of food and cash assistance are losing their benefits to thieves. Their monthly allotments are withdrawn from their accounts just hours after being deposited.

This fraud is forcing victims to make difficult decisions like not paying rent or having to cut back on food. And while this is a nationwide problem, states are handling it differently.

In Maryland, the Department Human Services (DHS) has said it can't reimburse victims, but WMAR-2 News Mallory Sofastaii learned that other jurisdictions have found a way to.

Sofastaii spoke with two victims whose Temporary Cash Assistance benefits were withdrawn from the same ATM, almost a month apart.

“It was posted on my card at 12 a.m. on April 3. April 3 at 5:42 a.m., it was taken off,” said Ciarra McMahan.

Frances Ames saw an unauthorized transaction on her account on May 2 while her Electronic Benefit Transfer (EBT) card was in her possession.

“I noticed that my money was taken off my card at 1:47 a.m. at Wells Fargo Bank at South Eden Street,” said Ames.

Ames’ neighbor reported that her benefits had also been stolen two minutes earlier at the same ATM in Harbor East.

Ames is now out $650. McMahan, a mom of three kids, lost $780. Both women contacted Sofastaii for help.

“You know, I had to pay rent. I have to take care of things for me and my child. I have an 11-year-old daughter,” said Ames.

When these women reported the thefts to Maryland DHS, they were told that money is gone and it won't be replaced.

“These programs are federally funded. By way of federal regulations, as a state, we are unable to replace the benefit for that particular month or months that were stolen,” La Sherra Ayala, executive director of the Family Investment Administration for Maryland DHS, told WMAR-2 News.

Ayala said her agency connects these victim with other resources, such as the Department of Housing and Community Development's (DHCD) emergency rental assistance, other food banks, food pantries, and food programs, DHS Emergency Cash Assistance program, or the Baltimore City State's Attorney's Victims’ Emergency Fund, which compensates victims of crimes.

“I don't see why they aren’t replacing it. Why are they connecting us to resources if the money got stolen from them?” McMahan asked.

Help through these various programs can take time, requires more paperwork, and additional hoops when these families need these benefits now.

“And then when I try to go get help or try to reach out to anyone, it's like I'm getting the run around,” said Ames.

Spike in stolen benefits
Fraud reports in Maryland have gone way up. There were 93 cases reported to Maryland DHS in April 2022, compared to 8 cases the prior year.

In all of 2021, the agency received 141 reports. This year, as of May 9, there were already 290 reported cases. Around 800,000 families receive benefits through these assistance programs.

Benefit fraud is a nationwide problem. Fraudsters are using electronic devices to skim or clone information from EBT cards. Victims don’t know when or how their information is being compromised and that they’re not protected when the money is taken.

D.C.’s Department of Human Services also alerted its customers to a spike in stolen benefits, except they are reimbursing victims with local funds.

Maryland DHS maintains that they cannot replace stolen funds because federal regulations won't allow it.

A DHS spokeswoman sent Sofastaii a link to a specific section of those federal regulations clarifying that a state can replace program benefits when food is destroyed in a household misfortune, but it doesn’t address situations where benefits are stolen, nor does it say that a state can't replace benefits with its own funds.

Sofastaii learned that Maryland DHS did replace Temporary Cash Benefits for a limited number of victims, but it stopped because "there are no funds appropriated for this purpose." The agency declined to say how many victims were helped and the amount.

“You know, the point right now is these are your citizens in your city, in your state, and right now money's getting taken from us,” said Ames.

Sofastaii also specifically asked DHS what's preventing them from using state and local funds such as the $7.5 billion budget surplus to reimburse victims. A spokeswoman responded:

"The Supplemental Nutrition Assistance Program is a federal program and, as noted, federal regulations do not allow for SNAP benefits that have been stolen to be reissued using federal funds, as per 7 CFR 274.6(a)(3). … The Department of Human Services is also working in conjunction with the USDA Office of the Inspector General (OIG), the U.S. Department of Health and Human Services OIG, and our Department of Human Services OIG, as well as the Office of the Attorney General for our Department of Human Services, in order to investigate this and hopefully catch and prosecute the offenders. Additionally, we have embarked on an educational awareness campaign to inform our recipients to be mindful of where they swipe and to pay close attention to the devices themselves, along with tips and steps they can take to protect their cards."
- Katherine Morris, Communications Director, Maryland Department of Human Services

Sofastaii has been in touch with Congressman Dutch Ruppersberger's office who is now looking into this issue.

Below are the measures DHS recommends customers take now to better protect their personal information and EBT cards:

  • Change your PIN often. You can do that today by calling the number on the back of your EBT card. You can also change your PIN online at www.connectebt.com/mdebtclient
  • If your benefits have already been compromised, call your local Department of Social Services to ‘freeze’ the use of your card. This will prevent new unauthorized transactions on your card.
  • If your card has been stolen or lost, you must call the Maryland EBT Customer Call Center at 1-800-997-2222 to order a replacement card. When activating the replacement card, please be sure to create a unique PIN. Avoid reusing the old PIN.
  • Immediately report any EBT fraud to your local police department and submit a copy of the police report to your local Department of Social Services
  • Stay up to date with the federal USDA’s Food and Nutrition Service’s SNAP SCAM Alerts