How State Government Should Tackle Benefits Fraud

Earlier this year, a Maryland family logged into their account only to discover that they had become victims of fraud. They were robbed of their government-provided Supplemental Nutrition Assistance Program (SNAP) and cash assistance benefits. When they reported the crime, they were told that the benefit could not be replaced—and they were out of luck. 

For many families, these benefits are a lifeline to stay afloat at a time of inflation and skyrocketing cost of living. Unfortunately, this type of fraud is yet another example of a growing trend: bad actors intercepting benefits by preying on America’s fragmented identity infrastructure.

It’s no secret that networks of cybercriminals, nation-state actors, fraudsters, and scam artists have set their sights on public sector benefits programs. Much of this can be attributed to the reality that identity fraud is like running water and will always find the path of least resistance. For years the commercial sector has worked to address these challenges and taken steps to implement the infrastructure needed to combat fraud. 

But against a backdrop of competing priorities, shrinking budgets, fire drills, and public pressure to take action, the reality is that it’s difficult for many state officials to know where to begin when tackling a problem of this magnitude. In some cases, it may seem easier to look for quick solutions. 

While this may help address the problem in the short term, it often does little to stop the dynamic and ever-evolving tactics fraudsters employ in the long term. 

To drive systemic change and best position state governments to combat fraud over the long run, we need a whole-of-government approach with a focus on establishing an effective foundation to combat identity fraud as a matter of practice across agencies and across states.

So what should be done? 

It begins with getting on the same page about what agencies are combatting. This means developing common definitions and taxonomies so that all levels of the organization are speaking the same language—the worst time to discover that leaders are talking past each other is in the middle of a crisis or a fraud event. More often than not, there isn’t a common reference used for all agencies and even across different teams within an organization, including cybersecurity and program integrity analysts.

Additionally, state and local policymakers, enforcement agencies, industry experts, and public servants must work together, share best practices, identify common bad actors and suspicious activity, and engage in discussions about what kinds of transparent policies are needed to effectively combat fraud. 

Finally, state agencies must embrace a data-driven mindset by adopting an analytical approach to executing limited run pilots or data studies intended to evaluate measures of effectiveness and performance for vendor capabilities. This would go further to help identify gaps and areas where tested solutions can have an adversely affect groups on the basis of race, color, sex, or national origin.

The trends we see in fraud will not end overnight. It will take concerted effort and cooperation among agency leaders to set up a strong foundation for effectively fighting fraud. 

The payoff, however, will be a future where data is the driver of identifying fraud spikes, deploying targeted responses to stop the bleeding and ensure that benefits get to those that need them most—and not to the fraudsters and scam artists.