Consumer alert: NY confirms switch to EBT cards with chips

We’ve reported on the rise in SNAP benefit theft in Monroe County. In June alone, there were more than 350 cases in the county. This is because EBT cards, which look like credit cards, are particularly vulnerable to skimming.

Think about the last time you used a cassette tape. Currently, the government is handing out billions of dollars to cards that use the same technology that was invented in the same era that the cassette tape became popular – the ’60s. EBT cards use only a magnetic stripe, making it easy for thieves to use skimming devices and steal data from the cards.

But late Thursday afternoon, New York’s Office of Temporary and Disability Assistance, the office that administers the food assistance program, sent out a statement saying:

“OTDA is in the early stages of transitioning to chip technology for New York EBT cardholders. This includes working with our existing vendors to determine the potential costs and find the most efficient and effective way to protect New Yorkers from electronic theft of their benefits. OTDA takes every report of benefit theft seriously and continues to work closely with local, state and federal authorities to provide all necessary information to help bring perpetrators to justice. However, all EBT cardholders should remain vigilant about these scams and take some basic precautions to protect themselves, including carefully checking point-of-sale devices, regularly changing their PIN, frequently reviewing transaction history and locking their card immediately after use.”

I asked an OTDA spokesperson if that means the department can move forward with the transition to chip technology without legislative action. At the time of writing this article Thursday evening, I had not yet received a response.

Meanwhile, New York State Senator Jose M. Serrano has proposed a bill that would mandate the use of chip technology, which is far more secure than a magnetic stripe because the chips protect your account information through encryption.

Senator Jose M. Serrano: “My bill, S27823A, therefore calls for the use of chip technology similar to the technology we see on debit and credit cards.”

Serrano represents the 29th District, which includes the South Bronx and East Harlem. He proposed the bill last year, and the Senate passed it.

Deanna Dewberry: “Transferring all this to chip technology sounds expensive. How are we supposed to pay for it?

Serrano: “Well, it’s hard to put a figure on how much it would cost in New York State.”

But we can estimate the cost by looking at the costs in California, one of only two states that will convert their EBT cards to chip technology this summer. California has allocated $50 million for the conversion, which is only a fraction of the cost lost to skimming, an estimated $10 million per month.

Between August 2023 and March of this year, $28.4 million in replacement benefits were paid out. The amount stolen is likely to be even higher, as there are likely skimming victims who did not apply for replacement benefits.

Serrano: “In the long run, this will save money by ensuring that people do not lose their entitlements and do not have to apply for a refund of the lost entitlements.”

Blackberry: “There have been a number of members of Congress who have proposed the chip technology. Why shouldn’t the federal government take the lead and bear the cost instead of entrusting it to New York?”

Serrano: “We in the state, as elected officials, are looking for ways to find solutions, but also ways to complement the work of the federal government. But I think it’s important that we in the state take the lead and show a good, aggressive model.”

There’s no question about that. It will be years before New York switches to chip technology, so in the meantime, state leaders are urging EBT users to stay vigilant. You now have the option to lock your account through the app, and you should keep it locked until you want to use your card.