Could A Lawsuit Finally Spur New York into Action on Food Stamp Theft?

“I’m very angry, I don’t understand why the state doesn’t do anything,” said Gelman.

New York has been a target for a practice called skimming, in which thieves place hidden devices at registers to compromise payment cards. Emails obtained by Focus show the state has for years been considering a tech upgrade that could curb skimming, but has failed to take action.

According to the US Department of Agriculture, which oversees SNAP nationwide, New Yorkers have reported over $80 million in stolen benefits since 2022. Nearly 3 million New Yorkers use SNAP, with the average household receiving $376 in monthly benefits.

The lawsuit, filed by Legal Services NYC, calls on the state to transition to more secure card technology and compensate victims for their losses.

“We saw increasingly these clients were coming in with SNAP skimming issues,” said attorney Alison Roberts. The lawsuit argues that the state has failed to protect users like Gelman against repeated theft, leaving them vulnerable to food insecurity and financial harm.

OTDA declined to comment on pending litigation.

Though advocates have been calling on the state to adopt more secure, encrypted chips for years, state officials have shared little detail about their plan to do so. Meanwhile, several other states have made or started to make the transition after congressional attempts to mandate the USDA to adopt chip cards nationally have stalled.

California was the first to roll out the more secure cards earlier this year, and Oklahoma is slated to follow suit next. Maryland, Massachusetts, and New Jersey are also taking steps to adopt chip cards.

“Allowing a subpar technology that leaves clients and beneficiaries open to skimming means they’ll lose benefits,” said Roberts. “It’s not fair that, depending on which state you live in, your benefits could be taken at any moment.”

In 2023, Congress set up a limited reimbursement system for stolen SNAP benefits. But funding dried up suddenly in late December as Congressional talks to extend the program broke down.

With refunds no longer an option, Roberts said clients like Gelman are forced to make “an impossible choice” between paying for food or other necessities like housing. Gelman, who lives alone, said there’s little left to spare from her fixed Social Security income after paying her regular bills. She also suffers from arthritis, has limited mobility, and relies on a pacemaker.

As a result of the stolen SNAP funds, she said she was unable to purchase Kosher foods for Passover or celebrate Hanukkah. She called her 90th birthday in April an “unhappy” one as she abandoned her plans to buy herself a blouse — the only new item of clothing she would have bought in over a decade.

“Thousands of people are left without food stamps and nobody helps,” said Gelman. She noted that Governor Kathy Hochul’s office has not yet replied to a letter she sent earlier this year seeking accountability for defrauded SNAP recipients like herself.

Plaintiff Yiraldy Rodriguez had to borrow money from her mother to cover food costs when over $800 in SNAP benefits went missing from her account in late 2023. She relies on the program to feed herself and her two daughters in the Bronx, buying everything from rice and oil to meats and fish.

Speaking through a translator, Rodriguez said that she remains concerned that her benefits will be stolen again and won’t be eligible for a refund like they were in 2023.

This year is shaping up to be one of the toughest years for food insecurity. As a way to partially fund tax breaks for corporations and the wealthy, Congress is now preparing to make historic cuts to SNAP that would force New York to pick up billions in federal costs. The move is expected to slash benefits for over half a million residents.

The Trump administration has rolled back support for food banks and laid off workers at the US Department of Agriculture — which oversees SNAP— in droves. The president’s controversial tariffs, which have set off a global trade war, are also driving up the price of groceries.

A Ticking Clock

Advocates and policymakers have been urging the state to take up chip cards for years.

Empire Justice Center and Legal Aid Society sounded the alarm on skimming in late 2022, imploring the state to renegotiate its contract to allow for a chip upgrade. Legislative proposals requiring a switch to chip cards have failed to gain traction in Albany since 2023.

The state is currently locked into a seven-year, $69 million contract with Fidelity Information Services, LLC, which ends in September 2030. The company provides the cards used to access SNAP benefits in several states across the country including New York and California, which transitioned to chip cards earlier this year.

State officials have been tight-lipped on chip cards even as New York has increasingly become a hotbed for skimming. Last summer, OTDA officials told reporters they were “in the early stages of moving to chip technology” but provided no further details. When pressed for a status update during a February budget hearing, the agency seemed to shrink back from that plan.

“We understand the movement to chip cards is the best path forward,” said OTDA Commissioner Barbara Guinn, who estimated the transition could cost the state as much as $40 million. “Right now, we do not have resources within the agency budget to move towards chip cards.”

The clock is ticking. Under current federal rules, states evenly split SNAP administration costs with the USDA, which would reduce New York’s share of chip card costs to $20 million, based on Guinn’s estimate. However, if Congress moves forward with proposed changes to SNAP, New York could see its share balloon to 75 percent, making the upgrade costlier.

Transitioning to chip cards has been a slow process that has required states like California to work closely with the USDA for years. It’s a dynamic that’s likely to shift as the Trump administration continues to eye the USDA for even more cuts and staffing reductions.

“I definitely agree that New York should have done this years ago,” said Roberts. “There’s no reason for New York to be lagging behind.” Roberts said the state still has an opportunity to make things right. “Windows are changing, but that doesn’t mean they’re closing.”

OTDA has declined to elaborate how it arrived at the $40 million price tag. The agency has also failed to respond to a public records request filed by New York Focus in February seeking its communications with California, Oklahoma, and the federal government on chip cards.

California’s Department of Social Services, on the other hand, had no trouble providing Focus with its emails with New York officials.

‘Full Steam Ahead’

Emails show New York has been discussing a possible move to chip cards with California officials as far back as 2022. One message, dated Dec. 13, 2022, referenced an upcoming conference call between the two states as OTDA prepared to discuss the matter privately with Hochul’s office.

Two weeks later, OTDA emailed California again for more information on chip cards to prepare for an internal meeting with the agency’s then-commissioner. By January 2023, OTDA staff prepared for upcoming budget hearings with New York legislators who were pressing forward on the tech upgrade.

But soon after, email communications between the two states came to a standstill for over a year. During that time, Congress set up a system to issue limited refunds for stolen SNAP benefits, temporarily allaying concerns around skimming.

Emails picked up again in September 2024 when an OTDA staffer reached out to California to ask about various contractual and technical changes needed to enable a chip card transition. It was around this time that New York was working on an unspecified procurement proposal related to SNAP benefits.

In December 2024, the same staffer wrote that New York was “very eager[ly]” watching California’s chip card rollout, which was slated for 2025. “We are full steam ahead ourselves in that direction but still have some procurement hurdles and approvals to get by, so we are not looking until Spring of 2026 if all goes well,” he wrote.

By Jan. 22, 2025, OTDA had seemingly ironed out a cohesive plan to finally make chip cards a reality. An email outlined a long list of expenditures the state would need to convert roughly 3 million cards, including costs to field an estimated 30 percent rise in calls to customer service, print informational brochures, and cover ongoing licensing fees needed to process chip transactions.