NYS accused of leaving SNAP benefit cards susceptible to skimming theft

New York State is failing to protect its most vulnerable citizens from widespread electronic theft of food benefits, according to a new lawsuit.

Between 2023 and 2025, according to the lawsuit filed last week in federal court by Legal Services NYC, a nonprofit representing low-income city residents, scammers employing a method of theft known as “skimming” stole at least $51 million in Supplemental Nutrition Assistance Program (SNAP) benefits, formerly known as food stamps, from state residents. That total includes hundreds of thousands of dollars stolen from hundreds of Long Islanders, Newsday reported last year.

The lawsuit names as a defendant Barbara Guinn, commissioner of the state’s Office of Temporary and Disability Assistance, which provides the benefits. It says the scammers exploited the magnetic strip technology the state uses for its benefit cards to commit at least 110,000 thefts. OTDA had a proven solution in the electronic chip-enabled “tap-to-pay” technology used in many credit and debit cards — as well as a promise from the federal government to cover half the administrative costs of switching — but failed to take it, according to the suit.

“New York’s failure to implement chip technology is clearly a choice,” according to the lawsuit. The lawsuit asks a judge to order the state to update its technology “as soon as practicable” and establish a process for replacing skimmed SNAP benefits.

An OTDA spokesman declined to comment on pending litigation but said the agency would soon release a request for proposals seeking a vendor to provide magnetic strip cards as well as a chip card option.

Guinn, testifying at a February joint budget hearing of the State Legislature, said “movement to chip cards is probably the best path forward in terms of us being able to protect public benefits.” She said that for now, the agency instead currently recommends that cardholders use an agency app to lock their cards when not using them, though advocates have criticized the lock feature as ineffective and hard to use.

Guinn put the first-year adoption cost for more than 1.5 million SNAP cards at up to $40 million. OTDA has a budget of $7.7 billion, but Guinn told legislators that the agency did not have the resources to make the switch. President Donald Trump’s tax cut plan, now being debated in the Senate, could add $225 million annually to the state’s SNAP administrative costs, according to the OTDA.

In an interview, Bronx Legal Services staff attorney Alison Roberts, one of the lawyers who filed the suit, said that adopting chip technology “would save [the state] money and allow people to eat.” But, she said, state officials have offered “no concrete plan, no timeline for implementation, and there’s not a vendor who’s going to do this, as far as we know. The issue is that New York is not taking steps to implement chip cards at all.”

Newsday reported in 2024 that over the past two years, scammers had taken at least $374,311 in benefits from hundreds of Long Islanders who were legally entitled to them, forcing victims to rely on family or food pantries or go without food. A federal law that provided for the replacement of some skimmed funds expired in December.

SNAP is the largest food assistance program in the country, reaching about 3 million New Yorkers. Skimming has been on the rise here and nationally for years, according to the U.S. Department of Agriculture, which administers SNAP. As of early May, according to USDA, California was the only state issuing chip-enabled cards, but New Jersey, Maryland, Oklahoma and Alabama were close to issuing chip cards.

Plaintiffs in the lawsuit include a 90-year-old Brooklyn woman, Anna Gelman, who lives on state and Social Security benefits totaling $1,075 per month. Gelman’s SNAP benefits were stolen in December and again in March, according to the lawsuit. After the March theft of $409, she could not afford to buy kosher food for Passover and celebrated one of the most significant holidays in Judaism with a box of matzo that someone gave her.

Susan Kingsland, deputy director of social services for another plaintiff, La Red de Pueblos Trasnacionales, a Manhattan-based organization serving Indigenous immigrant groups living in the city, said she spends up to a fifth of her work hours each week trying to help clients recover skimmed funds. “It’s been going on for years, but it’s reaching crisis proportions, especially where we work in the Bronx,” she said. 

Criminals, often working in groups, sometimes with merchants, skim benefits by illegally installing devices on point-of-sale terminals to capture card data and record cardholders’ PIN entries, according to the FBI. They use the captured data to make fake payment cards and then steal from victims’ accounts or make unauthorized bulk purchases of items that are easy to sell like baby formula, energy bars or candy.

“This is fraud — it’s perpetrated on people who are following all the rules, need the help and have no recourse,” said Ed Bolen, director of SNAP state strategies for the left-leaning Center for Budget and Policy Priorities. “Every state should have chip cards in place.”