Food-aid clients victims in debit fraud case

Count food stamp card users now among the victims of the Aldi debit card fraud case.

The state of Illinois recently issued new Link debit cards to about 6,000 users after finding out thieves had hacked those users' accounts. The cardholders had used their Link cards to pay for groceries at Aldi stores this fall. Thieves obtained account data from the magnetic strip on the back of the cards.

The thieves made new cards containing the stolen data. They used some to withdraw cash from accounts and others to make purchases. The fraudulent withdrawals and purchases were made in California, according to Tom Green, a spokesman for the Illinois Department of Human Services.

The state started getting complaints from clients in mid-November. It has not determined the total loss yet. It has reported the fraud to the federal Agriculture Department, which funds the Supplemental Nutrition Assistance Program.

“Unfortunately, this occurred around the first of the month when many benefits were issued,” Green said. Customers who could not wait for a new card to arrive in the mail were advised by letter to go to a DHS office for a replacement.

In September, customers of Aldi stores in at least 11 states, including the Midwest. New York and Connecticut, found that thieves had stolen money from their bank accounts. Batavia-based Aldi said that it found compromised debit-card terminals in some of its stores. Aldi accepts checks, cash and debit cards for payment, but not credit cards. It requires debit-card users to use their PINs.

In suburban Chicago, close to 60 related thefts were reported to St. Charles police, and several hundred to Buffalo Grove and Wheeling police. Reports were also received in Kane County and Elburn. In Buffalo, N.Y., one bank estimated that it lost $850,000 to the fraud.

Local police agencies and the Secret Service are investigating. There have been no arrests.

Aldi previously declined to say how its machines were compromised, including whether PIN-and-data skimming devices were attached to the machines. Some skimmers also use tiny cameras to record finger movements on the number keypad.