California reported monthly thefts from electronic benefit cards have dropped by roughly 80% from a peak of $20 million to just over $4 million, Gov. Gavin Newsom’s office said, marking the steepest decline since a wave of skimming schemes devastated low-income households two years ago.
The thefts still amounted to more than $4 million a month last fall across the state’s CalFresh food assistance and CalWorks cash welfare programs, according to a press release from Newsom’s office. That is down sharply from two years ago, when recipients were reporting $20 million a month stolen from their accounts. The state uses taxpayer money to reimburse victims when they report theft.
Newsom credited the reduction to anti-fraud technology, including more secure electronic benefit cards embedded with electronic chips and a mobile app that allows recipients to freeze their EBT accounts to prevent unauthorized withdrawals.
“In California, we’re leading the way by turning innovation into action by stopping theft and ensuring benefits reach those who truly need them,” Newsom said in a press release.
Newsom’s office announced the improved numbers after the Trump administration ramped up threats to California over allegations of fraud in public benefits. MSI previously reported that the 80% decline in EBT theft came as Trump escalated pressure on Democratic-led states over benefits fraud, using a wave of prosecutions over social services fraud — some involving immigrants — as justification for aggressive immigration enforcement actions.
Earlier in January, the Trump administration froze some federal social services funding to five Democratic-led states including California. A judge has since halted the freeze, which included funds for the CalWorks cash aid program.
The type of fraud Newsom cited reductions in is not traditional “welfare fraud” by program recipients but theft by third parties. Thieves have used hidden “skimming” devices to steal card numbers from EBT cards loaded with CalFresh and CalWorks benefits, then duplicated the cards and drained them before recipients could use their own benefits.
California was particularly vulnerable because of the size of its social safety net, with roughly 300,000 families receiving cash aid and 3 million receiving food assistance. CalMatters reported in 2023 that the state, previously focused on detecting fraud by recipients, had ignored warnings and delayed a proposal to introduce chipped EBT cards.
When pandemic-era benefits such as boosted unemployment aid and stimulus checks drew thieves to the system, the magnetic-strip EBT cards were among the most vulnerable targets. Nearly 200 people have been charged across California in the EBT schemes, Newsom’s office said.
Since 2023, the state has responded by issuing chipped EBT cards and introducing the account-freeze app. Last year, Newsom said, the state began using a computer model to detect fraudulent withdrawals and forced resets of PINs for some CalWorks recipients.
But local welfare fraud investigators said Newsom’s numbers present too optimistic a picture.
Gregory Mahony, president of the California Welfare Fraud Investigators Association, said he believes the state’s reported thefts are undercounted. The figures are based on how much the state reimburses county welfare departments each month to return victims’ benefits, he said, but some recipients do not file reports, or report months of thefts and receive only partial reimbursement.
Mahony also criticized the California Department of Social Services for dropping a requirement in 2023 that victims file police reports each time their benefits were stolen in order to qualify for reimbursement, a change he said has hurt the state’s ability to track theft and fraud.
“This is not a systemic victory,” Mahony said in a statement. “It is a delayed and partial mitigation of a crisis long allowed to grow unchecked.”