Food stamps, cash assistance debit cards to get more secure in NY after 7 On Your Side Investigation

NEW YORK (WABC) -- New York State officials are promising to make debit cards for food stamps and cash assistance benefits more secure after an investigation from 7 On Your Side Investigates.

The Office of Temporary and Disability Assistance told Eyewitness News that the office is in the early stages of moving to chip technology for New York EBT cardholders. The cards right now have only swipe technology, which has allowed criminals to more easily steal the benefits of thousands of New Yorkers - a problem which has been occurring for the past several years.

New York City alone has used more than $28 million in taxpayer money since last August refunding people's stolen benefits, according to the city's Department of Social Services.

"We are all paying the price of this," Jill Berry, the First Deputy Commissioner of DSS, said. "All of us."

DSS said throughout the last year it has processed more than 68,000 claims for replacement benefits.

"Bad actors are taking benefits away from our clients," Berry said. "That means that they are taking all of our tax dollars for their own personal use."

According to the U.S. Department of Agriculture, which oversees the country's food stamps program, New York State has the highest number of stolen benefits.

After covering this widescale fraud, Eyewitness News investigative reporter Kristin Thorne pressed OTDA and the USDA for months on why they had not made the switch to more secure chip technology cards.

When she contacted OTDA in February a spokesman responded, "Unfortunately, chip technology is currently not a viable option as it is not currently employed in the EBT industry. Changes to the EBT system must be addressed at the federal level before these cards and terminals accept chip technology."

Eyewitness News contacted the USDA in March seeking comment as to what was causing the delays at the federal level. A spokesperson responded that card chip technology was being tested in several states, but "we do not have a timeline for full implementation of chip technology in SNAP. Implementing chip cards is a very complex process involving multiple state, federal, industry and retailer stakeholders."

However, when Eyewitness News contacted the White House about the federal delays and the drain the fraud is having on taxpayers across the country - more than $61 million according to the USDA - we received a different response from the USDA.

A spokesperson said New York State did not need federal approval to move forward with implementing chip technology.

"There is no prohibition on adoption of chip cards and states may choose to do so at any time," the spokesperson said.

He pointed to two other states, California and Oklahoma, which are making the switch.

Eyewitness News went back to OTDA with the information and asked how two other states are managing to make this change, but New York isn't.

The agency responded this time: "OTDA is in the early stages of moving to chip technology for New York EBT cardholders."

The agency said it was encouraged that progress had been made at the federal level establishing the technological standards needed to switch to chip cards.

The leaders of the New York State Social Services Committee - New York State Senators Dean Murray (R-Patchogue) and Roxanne Persaud/(D-Brooklyn) - are thankful to Eyewitness News for our efforts. They said they had been trying for years to get OTDA to switch to chip-enabled debit cards.

"We're basically paying double - the taxpayers are paying double to help the people who actually need it and the criminals are making out like bandits," Murray said.

"So when you hear we have to cut X and cut Y it's because of these things that we have to continue to fund," Persaud said.

OTDA would not provide Eyewitness News with a timeline of when the new chip debit cards would be available for food stamps and cash assistance recipients, saying they are working with their existing vendors to determine the potential costs, and the most efficient and effective way to move forward.

In the meantime, benefits recipients in New York can prevent their money from being stolen by freezing their accounts when they are not using their card. Go to the EBTedge app, turn on "Freeze" when you are not using the card. If you need to use the card, click "Unfreeze," make your purchase and then click "Freeze" again.

If you've had money stolen from your EBT card, visit the OTDA website.

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