Aspen Institute pilots real-time transaction blocking to combat EBT theft

The Aspen Institute is collaborating with four states to pilot a new technology aimed at preventing electronic benefit transfer (EBT) theft, as state agencies face increasing pressure to enhance the security of Supplemental Nutrition Assistance Program (SNAP) benefits. This initiative, part of the Institute's Financial Security Program, partners with JPMorgan Chase to implement real-time transaction blocking for EBT cards, which are used by SNAP recipients to access their monthly food assistance funds, with further coverage provided by StateScoop.

The new tool is designed to identify and temporarily block potentially fraudulent EBT transactions, mirroring fraud detection systems used by financial institutions. EBT theft has become a significant concern, with a recent survey indicating that 18% of EBT cardholders reported stolen benefits in the past year, amounting to an estimated $607 million. Theft primarily occurs through electronic scams like skimming, where devices attached to point-of-sale terminals steal card data, or by tricking recipients into revealing their account information. This highlights a security gap, as many EBT cards still rely on magnetic stripes rather than more secure chip technology.

The pilot aims to shift the burden of fraud prevention from individual recipients to the benefit administration systems, offering a layer of automated monitoring that reassures recipients. The program is being tested in states with varying levels of chip card adoption to assess the effectiveness of multiple security layers. The pilot is expected to launch in the first state next summer and will run for 12 to 18 months, evaluating the amount of money protected, the accuracy of fraud detection, and recipient opt-in rates.

Source: StateScoop