Aspen Institute pilots real-time EBT fraud blocking with states

The Aspen Institute is working with four states to test a technology-based approach to prevent electronic benefit transfer theft, as state agencies face growing pressure to strengthen security of Supplemental Nutrition Assistance Program benefits.

The Institute’s Financial Security Program, through its Benefits Transformation Initiative, is partnering with JPMorgan Chase to pilot real-time transaction blocking for EBT cards, issued to SNAP recipients and preloaded with their monthly food assistance funds.

The tool is designed to flag potentially fraudulent purchases and temporarily block transactions, similar to fraud detection systems used by banks and credit card companies. 

“EBT theft was one of the highest priority issues from the states that we work with,” Tim Shaw, director of the Benefits Transformation Initiative at the Aspen Institute, said in a recent interview. “This solution is really meant to target EBT theft and the criminals who are trying to take EBT funds from families who depend on SNAP to feed their families.”

EBT theft continues to pose a significant problem for SNAP recipients. 

An April report from public sector IT company Propel, which surveyed more than 8,000 EBT cardholders, found that 18% reported having benefits stolen in the previous year, with some victims losing more than $500. Propel estimates roughly $607 million in benefits were stolen from EBT households last year. 

According to Kira Tebbe, senior manager on the Benefits Transformation Initiative at the Aspen Institute, EBT theft isn’t limited to stolen physical cards. Tebbe said benefits theft primarily occurs through electronic scams that target card data or trick recipients into revealing their account details, known as skimming.

“The most common way, to our knowledge, is via skimming,” Tebbe said. “So these are devices that are attached to point-of-sale devices that steal the login information.”

Tebbe noted that skimming highlights the security gap between EBT and traditional payment cards, as only a small number of states have chip-enabled EBT cards and the majority still rely on magnetic-stripe technology. 

Regardless of method, the consequences of EBT theft extend beyond stolen dollars.

More than half of victims surveyed in the Propel report said they skipped or reduced meals, some borrowed money or went into debt and 35% admitted to struggling to pay bills or rent.

Shaw said the real-time transaction blocking pilot is intended to shift some of the responsibility for preventing theft away from individual recipients and toward the systems administering benefits. Sixty percent of respondents in the Propel survey said they would feel reassured by automatic, 24/7 fraud monitoring that flags suspicious transactions. 

“One of the things about the overall fraud narrative is that it largely avoids this conversation about what is theft versus individual fraud,” Shaw said. “A lot of this isn’t about people who are pretending to qualify for a benefit — a lot, if not most, of it is about Americans being targeted by people who want to steal their money.”

The nation’s SNAP program faces heightened scrutiny under the Trump Administration and provisions of the One Big Beautiful Bill Act. State agencies are also being asked to upgrade their benefits IT systems, improve program integrity and absorb new administrative responsibilities. 

Some states, like Minnesota, are investing in modernization as they prepare for the law’s requirements. Gov. Tim Walz recently signed a new $90 million legislative package to replace the state’s aging IT infrastructure and improve coordination between state and local agencies.

The Aspen pilot will not rely solely on chip-card technology. Participants will include states that have chip cards as well as states that have not adopted them, allowing researchers to document how multiple security layers work together.

While the pilot is still in the design phase, Tebbe said the Aspen Institute has been working with participating states since the spring on technology, vendors and coordination with the U.S. Department of Agriculture. She said she expects the first state to launch the tool next summer. 

“This is just something that is completely new on EBT cards,” Tebbe said. 

“The states that we’re working with are really in the driver’s seat. They know their fraud patterns that are specific to their state, they know their residents and their needs, so they are the ultimate decision makers on all of the details of the pilot,” she explained. “Like the specific features that the algorithm uses, how sensitive the algorithm is, how clients can opt in—all of those design decisions will be up to the states, and we imagine they will tailor it to their specific needs.”

The pilot is expected to run for 12-to-18 months, with researchers tracking how much money is protected, the accuracy of fraud detection and how many eligible recipients opt in. 

The goal, Shaw said, is to give states another layer of protection against a problem that has increasingly become a technology and systems challenge, not simply a matter of recipient awareness.

“Criminals are always trying to find new ways to steal people’s money,” Shaw said.