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Vast Increase In Electronic Benefit Transfer Card Fraud

Vast Increase In Electronic Benefit Transfer Card Fraud

An Electronic Benefit Transfer card (EBT), formerly known as food stamps, is designed to work like an ATM card or a debit card, and the money that is loaded onto these cards by the State should be used to feed and clothe needy kids. In a recent investigation by 11Alive, it was found that the use of EBT cards are being abused and card holders are using these funds at casinos, strip clubs and liquor stores.

The House Bill 138 is responsible for monitoring the use of EBT cards and if a person is found in violation of the restrictions, they could lose their benefits. Furthermore, any merchant who is caught accepting money from EBT cards for restricted services such as tobacco, could be fined $250 as well as lose their ability to accept these cards.

According to State Rep Andy Welsh, the House Bill 138 also includes technology which should restrict the illegal use of these cards. In this way, transactions that are restricted by the bill can be stopped at the point of sale. This bill is expected to reach the Governor’s desk by May after passing the Senate.

Meanwhile, members at the Department of Transitional Assistance in Boston reported an 87% increase of EBT card abuse and fraud in 2013. In response, the Commissioner Stacey Monahan has increased the number of investigators and has improved their computer systems in order to enhance their ability to catch those who are abusing the system.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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