True Cost of Fraud Study for SNAP

The LexisNexis® True Cost of Fraud™ Study for Supplemental Nutritional Assistance Program (SNAP) Agencies serves as a model framework by informing the level and impact of fraud on this critical program, including the challenges, volume, and cost, as well as the resources that agencies utilize to detect and prevent fraud. 

Discover the True Cost of Fraud for SNAP:

• Attacks and Costs: Every $1 of benefits lost through fraud costs SNAP agencies $3.72. This includes additional costs related to internal labor (for detection, investigation, reporting) and administrative tasks (for data exchanges, etc.). These attacks are primarily due to identity fraud, eligibility, account takeover, and trafficking from fraudulent Electronic Benefit Transfer (EBT) transactions. 
• Digital Transactions Increase Fraud: The cost of fraud is higher for agencies that accept more applications from mobile and web platforms. Mobile transactions represent an average of 15% across all channels including in-person, online, and call centers. Agencies that have more than 20% of mobile channel submissions experienced an even greater loss - $4.40 for every $1 of benefits lost through fraud.

Mobile and Web Channels Drive Increased Bot and Fraud Attacks:

• Unproven Errors Cost Money: The majority of fraud losses stem from inadvertent household errors (38%) and suspicious cases that are not worked given limited resources (34%). Though they represent the largest vector for fraud, many inadvertent errors are never proven due to lack of criminal investigation, or they are lost within the administrative process.
• Bots on the Attack: Agencies with above average mobile-based applications are being increasingly targeted by malicious bots .45% of these agencies indicate that bot attacks have increased year-over-year.
• Top Fraud Challenges: Identity-related fraud is a leading contributor to SNAP agency fraud losses and is present in 31% of reported cases. In addition to identity theft, 25% of fraud is from account takeovers, 24% from eligibility fraud, and 20% from trafficking of benefits.

Opportunity Exists

There is opportunity to increase the use of best-practice fraud mitigation methods involving a multi-layered solution approach and the integration of fraud solutions with cybersecurity and digital customer experience operations.

Want to learn more True Cost of Fraud findings? Download our study today.