Myths And Facts About Food Stamp Fraud

If someone offered you $100 for $60, would you take it? Of course. But why would someone offer that much when it’s clearly not worth it? Multiple reasons:

  • They may try to scam you after you pay first.
  • They may give fake cash/checks.
  • They try to launder money.
  • Their money has limited/restricted usage.

Take the SNAP benefits program as an example. Their members receive an EBT card where they receive financial help or groceries and nutrition. Unless you exchange for cash in person, you can’t legally convert them to cash.

Swapping $100 for $60 may not seem like a big deal. Everybody is doing it, and you get free money. Then, what’s wrong with food stamps?

What Is Food Stamp Fraud?

SNAP (Supplemental Nutrition Assistance Program) offers an income supplement to those who cannot afford healthy food. Although it changes with your income and family responsibilities, they follow a simple vision: the hungry deserve quality nutrition.

With that in mind, why would someone trade $100 worth of food for less? Do they need cash that much? The hungry, low-income Americans use to squeeze every penny and make every dollar count. Selling food stamps doesn’t make sense.

It’s safe to assume some of the SNAP recipients didn’t deserve the benefits. Perhaps they already have food covered but applied for SNAP to get easy money. 

There’re cases of people who used thousands, even millions, from the program under a dishonest application. Since the yearly budget is limited, that leaves out families who really need that help.

Don’t think you’re getting free money. It’s still a 1:1 trade if you consider the food stamps come from the taxes you pay. Thus:

  • Your money never helps the intended people.
  • Your money goes to fund someone else’s consumption, including tobacco, alcohol, and whatnot.

Luckily, this parasitic behavior only stands for 1% of the $40 billion yearly invested. That’s still millions of dollars that could help thousands of families. Statistic correlations show that every dollar spent will create new jobs, thus returning up to $1.2 – $1.7 in the long run. Every dollar not invested/sent to the wrong people costs the Government hundreds of jobs.

Is pursuing the 1% still worth it?

3 Types Of Fraudulent SNAP Practices

1% stands for over $400 million. Whether it affects the economy or not, wouldn’t you prefer that money to get better use? Right now, your tax money is funding a con man with some of these methods.

#1 Faulty Application

The easiest way to trick the system: submit a fake application. With enough skill, one can manipulate reports in no time. Combined with today’s editing technology, falsifying information is child’s play.

Those who cheat on SNAP benefits are likely onto welfare fraud, stimulus checks, and other social help. It’s easy to qualify with proof, but how do you get out the crooks who already got approved?

In SNAP, luckily, food stamps last about six months before they expire, and you need to apply again. Qualified people will have no problem re-applying for them.

Someone can access the program by misrepresenting data or just not reporting income. They will get labeled as low-income Americans and steal from social help.

#2 Imposter Fraud

When in desperation, the brain does crazy things, like taking more risks and emotional decisions. Let’s say a “SNAP rep” emails you for a benefits opportunity. However, you either need to pay a fee or enter sensitive data on registration: card PIN, SSN, banking information. 

What usually happens is, you get nothing from the imposter, and they disappear. That’s right: having no money still makes you a scam target. 

Imagine they have access to your bank account. They could load it with fake checks, use that money, and leave you with the debt after they bounce back.

Imposters may promise thousands worth of SNAP benefits, unexpected prizes, or helps in cash. Maybe they promise to extend your SNAP card for several years, if not a lifetime. It sounds too good to be true.

Even if you have no money, scammers can sell your data for hundreds of dollars. Don’t make yourself a target.

#3 SNAP Store Exchange

Dishonest sellers will be happy to get a $20-$40 commission for converting your card into cash. When it comes to benefits, cash has more use than EBT SNAP cards. 

Would you rather have $100 worth of food or $60 to buy anything?

Although it’s illegal, most will say Yes to it.

Imagine you walk into groceries and spend $10 on food, but your card has $100. The shop keeper may have a sign, “We exchange SNAP for cash,” or he mentions it on the checkout. He charges you about $20 to convert $100 minus the $10 you spent. 

Now, $10-$20 is the average amount Americans spend on groceries every day. If you pay a $20 commission, the seller has at least doubled their income. After expenses, the shop assistant charges all your EBT card money and gives you cash instead.

Thus, part of the tax money goes to someone who never should have received it. Once the authorities find this exchange store, they’ll be in trouble.

Also check: What is payment fraud and how you can avoid it.

What Can We Do?

Fortunately, ~99% of people make proper use of the SNAP funds. Mind that the ones who cheat may not even know it’s wrong. Since the consequences are only collective, it can be hard to emphasize without a social consciousness.

Keep the card to help yourself and use it in an intended way. The next time someone offers to buy it, remember they’re doing a disservice to the many families who need help. If you find out, after all, that you don’t need the card, the best thing you can do is give it to someone who does as a gift.

Now that SNAP recipients can buy online, it requires them to prepare for phishing and online store scams. Before you sign up for a new SNAP opportunity, question whether it makes sense: it could be a trick.

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