One Swipe Too Many

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It’s not hard to find a story about credit card fraud in the news. Even though you think you are doing your best to protect your finances, thieves can easily acquire your card number in a variety of ways and hold your credit report hostage, while laughing all the way to the bank. Usually, card holders can dispute the erroneous charges. After an investigation, the credit card company often writes off the theft as a loss and your balance is restored. Unlike credit cards, Electronic Benefits Transfer (EBT) cards work like debit cards. Once the money is fraudulently taken out of the account, the money is gone – and it could take a really long time to recover the funds, putting an underprivileged family in a bind when crucial benefits are unavailable. As a Cincinnati television station reports, the owner of a local child care center may have made one swipe too many on some EBT cards and now is accused of bilking the State of Ohio of more than $50,000 in child care fees.

WCPO.com reports that a day care center was shut down after state investigators determined an entire month’s worth of electronic benefits had been swiped over a two-hour window. State investigators say the owner had convinced some of the parents to leave their benefit cards with her. (If the allegations are true, it appears she then had an EBT card swiping party.) The article goes on to say that investigators were alerted to this case by a routine notice sent from the Ohio Department of Job and Family Services that came back marked ”return to sender.’? Following a site visit, it was determined that the child care center had previously moved out of the house that was now owned by a couple who had bought it from the day care center’s landlord. (So basically, the investigators think the child care center owner was still swiping EBT cards for benefits as if the children were still attending at the old location.) Although the owner has not been charged with a crime, her license to operate a publicly-funded day care was revoked by the state. Investigators are trying to recover the allegedly fraudulent payments.

EBT cards make it easy for cardholders to receive benefits, but it also opens an avenue for fraud. Ohio has been using the card for more than three years and now that electronic records are centralized, more fraud is being detected. To protect child care benefits, it is important for EBT cardholders to remember? 1) never share your EBT card number or PIN with anyone; 2) never give your EBT card to anyone else to use; and 3) the cardholder is responsible for all transactions made with the EBT card.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Day Care Shut Down over $50K Government Benefits Scam,” reported by WCPO.com on August 21, 2013.

CINCINNATI – A day care was shut down after state investigators say they caught the owner billing the state more than $50,000 for children who weren’t there.

“She had convinced some parents that they should leave the card with her,” said Benjamin Johnson, spokesperson for the Ohio Department of Job and Family Services. “Once the provider has the card, the provider can swipe the card at any time,” Johnson added.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.