Food Retail Industry Files Grievance to Address Electronic Benefits Transfer Failures

         WASHINGTON, DC — June 29, 2000 — Responding to numerous problems plaguing electronic benefits transfer (EBT) systems used by food retailers, Food Marketing Institute (FMI) has filed a formal grievance with the National Automated Clearinghouse Association’s EBT Council to address potential violations of the Quest Operating Rules by Citicorp and its EBT service providers, EDS and Deluxe. Numerous EBT system breakdowns in recent months have resulted in customer overcharges and delayed merchant payments, and they have prevented food stamp recipients from acquiring food.

“It is a tragedy to see food stamp recipients turned away without food because of errors committed by Citicorp via its designated service provider, EDS,” said Tim Hammonds, FMI President and CEO. “FMI is working closely with USDA and state agencies to minimize the adverse impact on consumers and to reimburse affected retailers. But it’s time for Citicorp, Deluxe and EDS to step up and take responsibility for the frequent system failures and to take action to correct the matter immediately.”

Key problems plaguing the EBT system include frequent outages, duplicate charges, loss of float, recipient rejection and uncollectable adjustments – all of which have contributed to reduced user confidence in the system. The situation is further complicated by retailer inability to use emergency vouchers when the system is inoperable.

Food retailers’ frustration with Citicorp and its contractors peaked on June 12-13 when the system was inoperable for 12 hours. Thousands of irate customers across the U.S. were refused benefits and retailers incurred substantial expenses due to lost sales.