Lawsuit Accuses State of Failing to Protect Victims of Benefits Theft
Recipients of public benefits debit cards have no recourse when their data and funds are stolen
LOS ANGELES – A Pacoima woman who fell victim to electronic fraud sued the state Thursday for its refusal to reimburse the funds she depends on to prevent homelessness and hunger for her and her kids.
The suit, filed in Los Angeles Superior Court, underscores a growing problem for government aid recipients across the country whose benefits are disbursed through Electronic Benefits Transfer (EBT) using debit-like cards. Just like traditional bank accounts, EBT benefits have become increasingly vulnerable to theft.
“People’s data is stolen, their funds are withdrawn, and they have nowhere to turn,” said Vanessa Lee, an attorney with Neighborhood Legal Services of Los Angeles County. “If they were customers with a traditional bank, they would be promptly reimbursed. But, because EBT customers are not protected by federal banking laws, unless the state enforces existing caselaw and statute, they are left without remedy.”
Evelyn Carpio, a single mother who receives government assistance to supplement wages from her job, was surprised when her card was denied at a grocery store due to insufficient funds. Carpio soon learned that her monthly benefits had been withdrawn in their entirety earlier that day, likely through a pernicious practice called “skimming,” whereby devices inserted into ATMs capture the information stored on a card’s magnetic stripes.
Carpio immediately reported the theft and filed a police report, yet the California Department of Social Services, which oversees the benefits program, refused to help her.
“I couldn’t believe it. I just couldn’t believe it,” Carpio said. “I was so scared. I had to borrow money because I didn’t have any money to pay the rent.”
The Department of Social Services does not recognize electronic theft, addressing only those instances when an EBT card is physically taken. After two years of lengthy appeals, and with the help of attorneys from Neighborhood Legal Services, Carpio was finally reimbursed. But countless families who depend on EBT cards—and are vulnerable to the same kinds of electronic crimes that have recently surfaced in mainstream banking—have nowhere to turn when their funds are stolen.
“Criminals have modernized their operations, so should the state,” said Antionette Dozier, an attorney with the Western Center on Law and Poverty. “Aid recipients are among the poorest families in the state, with incomes that put them in extreme poverty, below 50% of the Federal Poverty Level. Failing to secure for them the same kinds of protections from these modernized criminal activities that other consumers have is wrong.”
Below Are Links to News Coverage of this Case
ABC 7 Local News
Wall Street Journal
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Neighborhood Legal Services of Los Angeles County
Neighborhood Legal Services of Los Angeles County (NLSLA) is one of California’s most prominent public interest law firms. Each year NLSLA provides free assistance to more than 80,000 individuals and families through programs that expanded access to justice for the poor and address the most critical needs of Los Angles’ poverty communities. www.nlsla.org
Western Center on Law and Poverty
Since 1967, Western Center on Law and Poverty has led the fight in California’s courts, counties and capital to secure housing, healthcare and a secure safety-net for low-income children, women and men. Western Center’s attorneys and advocates are the impact litigation lawyers for the poor and their voice in Sacramento. www.wclp.org
For more information about this case, see press release linked below or contact:
Jessica Bartholow or Antionette Dozier with Western Center
Vanessa Lee with Neighborhood Legal Services