LIRR aims to curb credit card ticket fraud

New Long Island Rail Road efforts to curb fraudulent credit card ticket purchases will save the agency more than $5 million this year, officials said Tuesday.

The initiative combines stepped-up enforcement by Metropolitan Transportation Authority police and a new verification system at all ticket vending machines that requires customers to enter their ZIP code.

Fraudulent credit card sales peaked at $545,000 last May -- more than 2 percent of total credit card sales at machines. The figure was a big spike from past years, when bogus credit card sales accounted for less than one-half of 1 percent of credit sales annually, LIRR officials said.

According to the LIRR, credit card thieves would buy large numbers of tickets and then sell them at discounted rates on a sort of commuter black market. When the legitimate credit card holders would rebut the charges, the LIRR was forced to refund the cost, and lose the fare revenue.

The increase in bogus charges led MTA police to double its enforcement efforts -- setting up surveillance stings at stations and making 35 arrests between 2010 and 2011.

To further combat the fraud, the LIRR had installed a verification system on all its 272 ticket vending machines by December. By last month, fraudulent credit charges had dropped to $11,000, or 0.04 percent of all credit card sales, officials said.

"Talk about an effective initiative. It's basically down to nothing right now," said LIRR chief financial officer Mark Young.

SEE PHOTOSLIRR trains and commuters through the years

In a statement, LIRR president Helena Williams congratulated railroad employees and police for cracking down on the fraud, and encouraged riders who were aware of phony credit card purchases to report them to authorities.

"In these challenging financial times, we need to continue to look at ways to operate more effectively and save money," Williams said.