From $14M to $7.7M: Michigan reports major drop in food stamp fraud

Michigan cut the amount of fraud in its food stamp program by almost half in 2025, according to a state report released on Feb. 15.

The value of fraud reported in the Supplemental Nutrition Assistance Program was $7.7 million in 2025, the report said. That’s just more than half the $14 million reported for 2024.

Increased security helped the Michigan Department of Health and Human Services prevent and detect fraud, according to the report.

State and federal employees investigate stolen benefits, SNAP trafficking from business owners, and food stamp fraud, such as selling benefits for cash. Agencies have deployed algorithms to detect compromised SNAP and other benefits accounts, the report said. Governments have also detected and seized 33 skimming devices. Another new process helped identify cloned point-of-sale terminals. The government also tracks IP addresses on benefit applications so it can determine if people living outside the state apply for benefits.

Michiganders use Bridge Cards at about 10,000 retailers statewide, but criminals have stolen millions of dollars in benefits meant for low-income residents. Criminals install fake payment processors that steal information so they can clone the cards and deplete the benefit accounts. Criminals exploit this vulnerability because Michigan didn’t upgrade SNAP cards in 2015 when the private sector upgraded debit and credit cards from magnetic stripes to embedded chips.

The state health and human services department, which runs the SNAP program, fielded more than 26,000 complaints across all its programs in fiscal year 2025.

2025 SNAP Fraud Report by mcclallen

SNAP fraud evolves as the state and federal government use new strategies to combat it. In September, CapCon reported that over a 12-month period, about 235 criminals hijacked the credentials retailers use to receive SNAP funds. Health Dept. Director Elizabeth Hertel called those thefts “nearly impossible to trace.”

Michigan’s upgrade to chip-enabled electronic benefit transfer cards should help stop organized crime schemes, including card skimming and cloning, that drive much of today’s fraud, Haywood Talcove, CEO of LexisNexis Risk Solutions' Government Group, told CapCon in an email. But criminals adapt and shift strategies quickly, he said.

“Criminal networks will shift tactics quickly, so states need to take a layered approach,” Talcove wrote. “That includes stronger front-end identity verification, real-time transaction monitoring, cross-state data sharing, and advanced analytics to identify suspicious patterns before funds go out the door. Prevention is far more effective than ‘pay and chase’ recovery after the fact. Ultimately, protecting vulnerable residents and taxpayers requires a combination of modern technology, proactive controls, and independent oversight.”

At least eight other states have upgraded or are upgrading their SNAP cards: Alabama, Arkansas, California, Maryland, Massachusetts, New Jersey, Oklahoma and Virginia.

The state health department is upgrading the security on SNAP cards in 2026 and should start issuing new, chip-equipped cards by May, according to documents that CapCon obtained through a records request. The health department didn’t respond to a request for comment.

CapCon repeatedly reported on SNAP fraud in recent years. Rep. Jason Woolford, R-Howell, who sponsored legislation to require the state to use chipped cards, cited CapCon reports.