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The Effects of Technology on Food Stamp Fraud

Posted on February 03, 2015
The Supplemental Nutrition Assistance Program (SNAP), formerly the federal Food Stamp Program, helps low-income individuals and households obtain more nutritious food. In fiscal year 2013, SNAP provided about 47 million people with $76 billion in benefits. The program has long been a target for fraud, but new technology has changed what that fraud looks like and how the government detects and prevents it. Today’s WatchBlog explores what we’ve found about technology and SNAP fraud. How Technology Changed the Face of SNAP Fraud In the past, benefits were distributed via paper food stamp coupons. These could easily be sold, or trafficked, between individuals. Generally, individuals sold their benefits for less than face value—commonly 50 cents on the dollar. We previously reported on how using electronic benefit transfer (EBT) cards that work much like debit cards instead of paper coupons made it harder to traffic benefits. It is still possible for people to traffic benefits with the EBT cards, either by selling the cards or allowing others to use their cards. Now, beneficiaries can use social media and e-commerce sites to sell benefits, making it even easier to find buyers. But technology could also make it easier to monitor and prevent potential SNAP fraud. The Department of Agriculture’s Food and Nutrition Service (FNS) helps states install free web-based monitoring tools, as we reported. No Silver Bullet Unfortunately, the FNS tools are not perfect, according to some of the states we asked. The tools are meant to save states from manually searching websites for potential fraud. However, our testing found that manual searches not only found more potential fraud, but also suspect postings that the automated tool didn’t (see the figure below).

 GAO-14-641(Excerpted from GAO-14-641)

FNS officials told us they have contacted popular e-commerce and social media websites in the past regarding potential SNAP trafficking, and continue to work with the websites on detecting and removing postings advertising the sale of SNAP benefits. We recommended in August 2014 that, among other things, FNS reassess and improve the effectiveness of its guidance on software tools and of the tools themselves. You can track the status of this and all of our open recommendations in our recommendations database.
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