2023 House Resolution 127

Whereas, The Supplemental Nutrition Assistance Program, commonly referred to as SNAP, provides resources for low-income individuals and their families who would otherwise be unable to afford enough food to feed themselves; and

Whereas, Those who desperately rely on SNAP benefits have had their benefits stolen. Millions of dollars have been stolen from the program by both domestic and transnational organized criminal groups. In May 2023, Michigan Attorney General Dana Nessel announced charges for a group accused of making at least four million dollars in fraudulent purchases by stealing benefits from over eight thousand electronic benefit transfer (EBT) cardholders; and

Whereas, The United States Department of Agriculture (USDA) has antiquated technology and limited program oversight. The USDA only spends one twentieth of one percent of their budget on anti-fraud efforts. Instead of updating their technology to protect SNAP beneficiaries, the USDA simply puts up warnings and advises beneficiaries to try not to have their EBT cards, which still use the old technology of magnetic stripes, skimmed by scammers; and

Whereas, SNAP beneficiaries carry the burden of SNAP fraud, often going weeks without the benefits stolen from them. Victims of fraud are encouraged to report fraud to police departments and government departments. By failing to update their technology, the USDA creates more work for the victims and individuals in law enforcement who must spend time and resources investigating criminals associated with food benefits fraud; and

Whereas, Given the recent cases regarding SNAP fraud, it is estimated the program’s fraud rate is over twenty percent. The USDA claims to have a retailer trafficking fraud rate of less than two percent, but they admit that they lack the adequate tools to accurately determine the rate. It is also highly unlikely the USDA’s fraud rate is lower than the average annual fraud rate of big banks and credit card companies that have much better technology to prevent fraud than the USDA; and

Whereas, To better protect against the theft of SNAP benefits, the USDA should implement new technology by switching EBT cards from magnetic stripe cards to chip enabled cards and requiring additional identity verification. The USDA should also restrict the area in which cardholders can use their cards and require cardholders to notify the department when they plan to use the cards outside of the restricted area. This would better protect against scammers in other states from being able to make fraudulent transactions; now, therefore, be it

Resolved by the House of Representatives, That we urge Congress to pass legislation and urge the United States Department of Agriculture to promulgate rules and implement more thorough security measures that would reduce the amount of fraud in the Supplemental Nutrition Assistance Program; and be it further

Resolved, That copies of this resolution be transmitted to the Speaker of the United States House of Representatives, the President of the United States Senate, Governor Whitmer, the Michigan Department of Health and Human Services, and the members of the Michigan congressional delegation.