Food Stamp/SNAP Fraud

Identity Fraud Scenario

Fraud in food stamps is a widespread problem driven by identity theft, selling of benefit cards and
inappropriate purchases.

The Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, is widely susceptible to fraud when benefits are exchanged for cash, also referred to as trafficking. SNAP fraud can occur when someone lies on their application to get benefits, or when a retailer provides customers with cash in return for their
SNAP benefits.

  • More than 47 million people rely on SNAP benefits to obtain healthy food — but it is estimated that in recent years more than $1 million in benefits were paid to people who were not actually eligible for
    the program.

  • 64% of Florida’s Medicaid clients also have SNAP or TANF. Putting identity management solutions on the front-end of the enrollment process when applying for state benefit programs could help states eliminate millions in fraud, waste and abuse across multiple programs like Florida Department of Children and Families.

  • According to an article posted on, one out of every 20 food stamp transactions is fraudulent.

Social Services agencies that provide SNAP or Food Stamps and other benefits are moving rapidly away from face-to-face interactions with their beneficiaries to online or telephone applications. While this improves efficiencies and customer service, it allows for more and more fraud because of a lack of identity proofing in these nearly anonymous transactions. The identity presented by the beneficiary is only lightly verified, with little documentation required -- documentation that can be easily falsified.

One of the most popular types of SNAP or food stamp fraud is a 50-50 split between food stamp beneficiaries and merchants. Instead of providing food, the merchant exchanges cash for the benefits and pockets half of the proceeds This is frequently seen in small, mom and pop, grocery or convenience stores who conspire with a small group of SNAP beneficiaries.

The Office of Management and Budget estimates Food Stamp fraud, waste and abuse at over $2.6B per year*, and most experts believe that number to be low.

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