CTA Targets Fraudulent Use of Free, Reduced-Fare Cards

November 12, 2014

Card-verification missions at rail stations, card audit aim to ensure cards are being used by authorized users; more than 1,800 improperly used cards collected

The CTA today announced that it is targeting the fraudulent use of free and reduced-fare cards, as part of a comprehensive, ongoing effort the agency has undertaken to analyze the steady rise over the past year in the number of free and reduced-fare rides taken on CTA trains and buses.

Last month the CTA began performing card-verification efforts at rail stations throughout the city and suburbs, verifying that individuals using any type of free or reduced-fare card were the cardholder listed on the face of the card. Regulations for free and reduced-fare programs—which include seniors, persons with disabilities, UPass, student fares and other categories—stipulate that those cards can only be used by the individual identified on the card, and can’t be transferred.

Since October 2014, the CTA has collected more than 1,800 free and reduced-fare cards during the card-verification efforts. It estimates that the lost potential annualized revenue from the fraudulent use of those cards at $2.8 million.

Separately, the CTA is conducting an audit of free and reduced-fare card usage to better understand card use, and ensure that individuals who qualify for free and reduced-fare rides are actually the ones benefitting. The audit expands upon the agency’s regular monitoring of special fare programs, including free- and reduced-fare rides.

The results of the recent CTA analysis found that of approximately 600,000 RTA free, reduced-fare and paratransit cards, slightly more than one percent are being used at a frequency far above the typical average for similar cards. The approximately one percent of cards CTA identified in the audit were used 10 or more times a day, at least twice in a 7-day period.

“Free and reduced-fare rides are intended for seniors, persons with disabilities and others who rightfully qualify for these important programs,” said CTA President Forrest Claypool. “We take any incident of fraud seriously and are taking steps to protect innocent customers from being taken advantage of, as well as protecting all other fare-paying customers from having to subsidize improper use of these programs.”

The CTA is also working closely with the RTA to continue education efforts for free and reduced-fare ride customers, including reminding them that their cards are for their use only and that they should be sure to store them in a safe place and not share them.

The CTA provides more than $100 million annually of state-mandated free rides and federally mandated reduced-fare rides, and receives only a small percentage of reimbursement from the state; last year the total was around $28 million. The remainder is paid for from the CTA’s annual operating budget.

The CTA initiated its audit following a 20 percent spike in free rides so far this year, which translates into an annual increase of more than 8.6 million free rides. 

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