MR #23.23: Replacement of Stolen SNAP Benefits Due to Electronic Theft

07/03/2023

Summary

• As a result of the increased reports of Electronic Benefit Transfer (EBT) theft, the Consolidated Appropriations Act, 2023 (the Omnibus) signed into law December 29, 2022 includes provisions allowing state agencies to use federal funds to replace stolen EBT benefits to victims of card skimming, cloning, scamming, phishing and other similar fraudulent methods.
• Effective 07/03/2023, the Illinois Department of Human Services (IDHS) will implement Illinois' process of replacing stolen SNAP benefits to victims of electronic theft. The Integrated Eligibility System (IES) has been modified to give Family Community Resource Center (FCRC) workers the ability to process theft claims in the system. Training is being developed to help workers learn how to process claims.
• The Illinois Link EBT card must be in the customer's possession at the time of the unauthorized transaction that resulted in the theft of benefits. The law does not change current federal regulations prohibiting replacement of SNAP benefits lost due to a customer's own misuse of their EBT card and/or PIN.
• New Form IL444-4986, Report of Electronic Theft of Illinois Link Benefits, has been created to report incidents of theft and may be completed by phone with a telephonic signature (the call must be recorded) or online with an electronic signature. A paper version may be completed and returned by mail or in-person to the local FCRC. 
• The theft must occur within the two-year timeline October 1, 2022 through September 30, 2024.
• Retroactive claims must be filed within 12 months of 07/02/2023. A retroactive claim is a theft that occurred between 10/01/2022 and 7/02/2023.
• A report of theft that occurred 07/03/2023 and after must be reported within 30 calendar days of discovery of the unauthorized transaction. The date a household reports their EBT Link card as stolen and requests a replacement is considered the "Date of Discovery".
• IES has been modified with a new EBT Theft Claim Module where workers will enter the theft claim information and certify the case. The system will process a claim and determine the appropriate replacement amount, or if ineligible, the applicable denial reason. After it has been processed the results of the claim, including the customer's notice will display for the worker to review. It is important for workers to review their entries for accuracy. Any errors must be corrected the same day.
• If eligible for replacement benefits, the total replacement amount cannot exceed the amount of the stolen benefits, or the amount equal to two months of the household's SNAP benefits, whichever is less. The replacement amount is the lesser of the:
  • actual amount of stolen benefits; or
  • household's benefit allotment amount for the two months immediately preceding the theft.
• A customer who has already had SNAP benefits replaced due to a theft more than two times in the same Federal Fiscal Year (FFY) is not eligible for another replacement.
  • FFY 2023 is from October 1, 2022 - September. 30, 2023; and
  • FFY 2024 is from October 1, 2023 - September 30, 2024
• Notice of Decision on Replacement of EBT Benefits Due to Theft (Form IL444-0370) will be systematically generated out of IES to notify the SNAP household of their eligibility. 
• The law does not change current federal regulations prohibiting replacement of SNAP benefits lost due to a customer's mishandling of their own EBT card and/or PIN.
• Illinois Link EBT Cash benefits are not eligible for replacement at this time.

  ---

Introduction

• Due to the increased reports of Electronic Benefit Transfer (EBT) theft, the Consolidated Appropriations Act, 2023 (the Omnibus) signed into law on December 29, 2022 allows state agencies to use federal funds to replace stolen EBT SNAP benefits to victims of card skimming, cloning, scamming, phishing and other similar fraudulent methods.
• Effective 07/03/2023, the Illinois Department of Human Services (IDHS) will implement the process of replacing stolen SNAP benefits to victims of electronic theft. Family Community Resource Center (FCRC) workers are responsible for accepting reports of electronic theft claims and entering the information into the EBT Theft Claim Module for processing.
• Because there have been incidents of electronic theft prior to the implementation of this policy by Illinois, customers are being allowed to file retroactive claims to have their eligibility determined for benefit replacement. Retroactive claims may be filed for thefts that occurred between 10/01/2022 and 07/02/2023. IDHS will use various communication methods to reach SNAP customers and inform them of their potential eligibility for retroactive benefits. SNAP customers who file an electronic theft claim, whether retroactive or current, must meet the requirements set forth by the law to qualify for a replacement.

What is Electronic Theft?

Card Skimming

• Card skimming occurs when devices illegally installed on ATMs or point-of-sale (POS) terminals capture card data or record SNAP household's' PINs. The data captured by skimming or other means can be used to create fake EBT cards (card cloning) and then used to steal from a households' account.

Scamming

• Other similar fraudulent methods of obtaining EBT card data may include, but are not limited to, scamming through fraudulent phone calls or text messaging that mimic official state agency messaging and phishing.

Who is Eligible for Replacement?

• SNAP customers who had their Illinois Link card in their possession at the time an unauthorized transaction occurred to steal benefits from their Link account through skimming, cloning, phishing, or a similar type of theft may be eligible for a benefit replacement if:
  • Form IL444-4986, Report of Electronic Theft of Illinois Link Benefits is completed either by phone, online, by mail or in-person at the local FCRC; and
  • The theft occurred during the allowable timeline October 1, 2022 through September 30, 2024. (Benefits are not replaced if the theft occurred outside of the timeline); and
  • A new Illinois Link card and a change in PIN is requested; and  
  • Retroactive claims must be reported within 12 months of 07/02/2023, and the EBT theft must have occurred between 10/01/2022 and 07/02/2023; or
  • For current thefts occurring 07/03/2023 and after, the theft is reported within 30 calendar days of discovery of the unauthorized transaction. The date a household reports their EBT Link card as stolen and requests replacement is considered the "Date of Discovery".

Note: The law does not change current federal regulations prohibiting replacement of SNAP benefits lost due to a customer's mishandling of their own EBT card and/or PIN.

How is the Request Made for Replacement?

• An electronic theft claim report may be filed through one of the following ways:
  • By phone 1-800-843-6154 Monday through Friday 8:30 am to 5:00 pm CST; or
  • Online @ www.link.illinois.gov;
  • By completing Form IL444-4986 and returning it by mail or in-person at the local FCRC.
• An electronic or telephonic signature is accepted when filed online or by phone. The telephonic phone call must be recorded.

What Amount of SNAP Benefits will be Replaced?

• The IES EBT Theft Claim Module is programmed to determine the appropriate replacement amount. If eligible for replacement benefits, the total replacement amount cannot exceed the amount of the stolen benefits, or the amount equal to two months of the household's SNAP benefits, whichever is less. The replacement amount is the lesser of the:
  • actual amount of stolen benefits; or
  • the amount equal to 2 months of the customer's SNAP benefit allotment directly before the theft occurred.

What is the Timeframe for Replacing Benefits?

• No later than 10 calendar days after the completed and signed IL444-4986 is received, FCRC staff:
  • will process all electronic theft claims for replacement benefits (both current and retroactive); and
  • a notice of approval or denial will be systematically mailed to the customer.
• Benefit issuance availability will follow the regular issuance schedule.

Electronic Theft Claim Replacement Process

Attestation and Completion of Form IL444-4986

• The FCRC worker will accept customer attestation of the EBT benefit theft as verification that the theft occurred. Customer attestation will be collected along with the following incident details via Form IL444-4986 that may be submitted by mail, in-person, electronically with signature or telephonically(must be recorded).
• The customer must complete the following required information:
  • Customer Name
  • Case identifying information
  • Date & amount of each unauthorized transaction
  • Validation customer had Link card in their possession at all times
  • Signature of attestation
• The information below on IL444-4986 is optionable and if provided is used for central office internal purposes. The customer is not required to provide this information:
  • Type of theft (skim vs. scammed)
  • Police report information
  • Details related to any scam that may have occurred
  • Details related to any known perpetrator

EBT Theft Claim Module

• An EBT Theft Claim Module has been created in IES that has smart flow steps. EBT theft claims received outside of a telephonic phone call will be uploaded to tasks titled "EBT Theft Claims". Tasks are monitored daily to ensure staff are meeting timeliness.
• The FCRC worker will review the household's transaction history in ebtEDGE to ensure that the transaction(s) occurred, the actual benefit amount, and that the EBT Link card has been replaced.
• When FCRC workers process claims, either through a task, or over a telephonic phone call with a customer, information is entered on the screens related to the theft in order to validate the case and the claim.
• IES will determine if there are any outstanding tasks or if any claims have been approved. If not, the worker will process as a new claim. Enter the date of the first theft. Enter each unauthorized transaction separately. Do not combine transactions. IES will then determine when the last time benefits were received prior to the date of first theft.
• It is important that staff review their entries for accuracy. IES does not know EBT transaction data. The date the household reports their EBT Link card as stolen and requests a new card is considered the "Date of Discovery". Inform customers who have not replaced their LINK card, that the card must be replaced.
• The Date of Claim is the date the claim is received in the local office with a signature. For a  mail-in theft claim, the file date is the date stamped as received in the FCRC. 
• The FCRC worker will certify the claim. IES will display the results and the notice correspondence. The approval of the claim creates the replacement issuance. The validation of a claim and the creation of any eligible issuance is done in the same process. Notice of Decision on Replacement of EBT Benefits Due to Theft (Form 444-0370) is systematically generated.

Notice of Decision

• IES will generate, new Notice of Decision on Replacement of EBT Benefits Due to Theft (Form 444-0370), with the specific approval or denial reason and will include information on requesting a fair hearing.
• A replacement will not be made while the denial is pending appeal.
• All EBT theft claims and the notice of decision will be electronically filed.

When is a Replacement Request Denied?

• Theft claim benefit replacement will be denied if the following has occurred:
  • A claim in which evidence indicates the theft incident occurred outside of the allowable timeline 10/01/2022 through 09/30/2024.
  • A claim is submitted by a SNAP household who has already received replacement benefits for 2 approved EBT theft claims in the same federal fiscal year (FFY).
    • FFY 2023 is from October 1, 2022 - September. 30, 2023; and
    • FFY 2024 is from October 1, 2023 - September 30, 2024
  • A claim filed 07/03/2023 and after is outside the 30-day timeframe from date of discovery.
  • A retroactive claim is received outside the 12-month timeframe of 07/02/2023.

The following Approval or Denial Reasons will appear on Form 444-0370 based on the reason the household is eligible or ineligible for replacement.

Notice Description	Notice Reasons
Approved for full amount.	This claim has been approved for the full amount of $____________ PM 22-03-00
Claim approved, but amount replaced is less than total theft amount (capped at the two times monthly benefit).	This claim has been approved for a replacement amount that is less than the claim amount. Reason for this action: The claim amount exceeds the maximum replacement amount. PM 22-03-00
Retroactive - Untimely filed claim.	This claim has been denied. Reason for this action: This claim was filed outside of the allowable 12-month timeframe. PM 22-03-00
Current- Untimely filed claim.	This claim has been denied. Reason for this action: This claim was filed outside of the 30-day time-frame from the date of discovery. PM 22-03-00
Household received the maximum replacement claims for the year.	This claim has been denied. Reason for this action: You have already received the maximum two claims replaced in the current claim year. PM 22-03-00
Household already received maximum replacement amount for this claim period (already issued two times monthly benefit amount for this incident period).	This claim has been denied. Reason for this action: The maximum replacement amount has already been received for this claim period. PM 22-03-00
Outside replacement period (prior to 10/1/22 or after 9/30/2024)	This claim has been denied. Reason for this action: This theft occurred outside the eligible replacement period, before 10/01/2022 or after 9/30/2024. PM 22-03-00

Manual Revisions

[signed copy on file]

Grace B. Hou

Secretary, Illinois Department of Human Services

Forms referenced

Form IL444-0370

Form IL444-4986