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The Alabama Department of Human Resources brought a contract to the Joint Contract Review Legislative Oversight Committee to help combat the widespread fraud in the Supplemental Nutrition Assistance Program.
The contract with Conduent State and Local Solutions, Inc., worth $6 million, will improve Alabama’s fraud mitigation services by transitioning to chip cards. Conduent provides these cards and must implement these services as a result.
DHR Commissioner Nancy Buckner spoke to the committee about how important this contract would be to the department and families.
“This fraud is much more sophisticated than client fraud, and it’s rampant across the nation. Alabama is one of the hardest hit states on it. So far, in the month of November, we’ve paid out almost $5 million in replacement benefits and processed over 13,000 claims where it’s stolen,” said Buckner.
Buckner spoke about a project with the Secret Service that discovered that card skimming was a primary method of stealing information from the cards. Devices were illegally installed on ATMs or point-of-sale terminals in stores to capture card data or record PIN numbers. Cards could then be cloned, and the data captured by skimming were used to create fake EBT cards to steal from households’ accounts.
“We sent out a press release again today asking retailers if they would check their equipment at least each day to make sure these [devices] aren’t on it,” said Buckner.
DHR recommends that EBT participants keep a close eye on charges applied to their account, since theft must be reported within 30 days of the purchase. Changing the PIN number twice a month, before funds are expected to be applied to the account, and making sure that simple combinations aren’t used to increase security.
“The thing is, we’re having trouble keeping up with replacing benefits. We can only replace them for theft two times in a year. So there’s gonna be a lot of folks calling if we don’t get a lid on this and shut it down,” said Buckner.
