BILL NUMBER: S9296

SPONSOR: PERSAUD
 
TITLE OF BILL:

An act to amend the social services law, in relation to establishing an
EBT card replacement program

 
SUMMARY OF PROVISIONS:

Section 1: Requires the Office of Temporary and Disability Assistance
(OTDA) to develop and implement a program to replace all EBT cards in
the state using magnetic strips with cards utilizing chip technology
within one year. It requires coordination between the Commissioner of
the Office of Temporary and Disability Assistance (OTDA) and all rele-
vant social services commissioners and EBT card issuers in the state.

Section 2: This act shall take effect immediately.

 
PURPOSE OR GENERAL IDEA OF BILL:

This legislation requires the Office of Temporary and Disability Assist-
              

ance (OTDA) to develop and implement a program to replace all EBT cards
issued in the state which utilize magnetic strips with cards that
utilize chip technology. This will align New York with the security
standards common in banking and credit card industries, drastically
reducing the vulnerability to skimming and cloning.

 
JUSTIFICATION:

Over 2.8 million New Yorkers depend on the Supplemental Nutrition
Assistance Program (SNAP) to put food on their tables. However, these
families are facing a significant threat from fraudsters who exploit the
outdated magnetic strip technology on current Electronic Benefit Trans-
fer (EBT) cards. These cards have become easy targets for skimming and
cloning, allowing criminals to steal SNAP funds directly from the
accounts of legitimate recipients. Last October, Spectrum News reported
that according to the Office of Temporary and Disability Assistance,
over 22,000 claims of SNAP skimming totaling more than $17 million have
been reported since January 2022. Temporary and Disability Assistance
(OTDA) to

This legislation requires the Office of develop and implement a program
to issue replacements for all magnetic strips EBT cards with new one
equipped with chip technology. This move will bring New York in line
with the security standards common in the banking and credit card indus-
tries, drastically reducing the vulnerability to skimming and cloning.
This legislation is a crucial step in safeguarding the benefits that
millions of families depend on for their daily sustenance.

States like California and Minnesota have already recognized the suscep-
tibility of the current magnetic strip EBT cards to fraud.  California,
for instance, is experiencing significant losses of approximately $10
million a month due to EBT card fraud. To combat this, California has
initiated a pilot program to distribute new EBT cards equipped with chip
technology starting May 2024. Minnesota has also reported substantial
fraud-related claims, prompting efforts to enhance EBT card security.

 
LEGISLATIVE HISTORY:
None.

 
FISCAL IMPLICATIONS:

None.