For every $1 lost in food stamps through fraud, agencies incur an average of $4.29 in costs, according to a new report.
Scammers’ and bad actors’ schemes to steal from the Supplemental Nutrition Assistance Program, a federal initiative to help low-income people and families buy food, cost agencies hundreds of millions of dollars annually.
SNAP fraud costs reached a five-year high, according to LexisNexis Risk Solutions’ newest fraud study.
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This $4.29 cost is up from $4.14 last year and $3.93 in 2024, according to the report.
Agencies that combine investments and data have a lower cost of fraud at $3.85 for every $1 of lost benefits compared with $4.76 for those that have not made investments in either.
One caveat is that most of the cost of fraud is not the theft but the cleanup.
Administrative costs versus the stolen benefits make up 77% of total fraud costs, meaning the value of stolen benefits is only 23% of what fraud costs agencies.
The One Big Beautiful Bill Act, enacted in July 2025, shifts more of the cost burden for payment errors and application-processing delays onto SNAP agencies.
Two-thirds of agencies surveyed say fraud has increased year over year.
Agencies juggling more benefit programs also see more fraud. More programs sharing one eligibility system means more doors for fraudsters.
A third of agencies integrated with just one other program, such as Medicaid, saw increased fraud compared with 71% of agencies integrated with three to five other programs through a shared system.
One catalyst for higher fraud costs is an increase in payment error rates, with agencies reporting stronger payment accuracy also reporting lower fraud-related costs.
Of agencies surveyed, 13% reported a less than 6% payment error rate, while 22% are at 10% or higher.
Two-thirds of agencies say they struggle to access or verify basic income data — things like wages, self-employment income and unemployment benefits — because it’s hard to get or because what they do get is incomplete or wrong.
Agencies with the most data gaps pay up to $4.97 per $1 lost, but agencies with the fewest data gaps pay closer to $3.23.
Haywood Talcove, CEO of the government business of LexisNexis Risk Solutions, said the real cost of fraud extends far beyond stolen benefits.
“Agencies are being asked to make faster, more accurate decisions, while managing increasingly sophisticated fraud schemes, rising payment integrity expectations and growing operational demands,” he said in a statement.
He said the study shows that success depends on more than technology, pointing toward modernized agencies with trusted identity, income and eligibility intelligence achieving more success in reducing improper payments.
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