Alex Warner believes that the well-publicised case of the hedge fund manager who dodged paying £42,550 in train fares is the tip of the iceberg

Transport industry news bulletins can be predictable – the usual guff around franchise awards or extensions, “jam tomorrow” station upgrades, big investments, gravy train salaries and big fat fare hikes, you know the score, same-old, same-old, year-on-year. However, one story that stands out from this year’s dross involved my beloved South Eastern Trains – playground of my youth and the theatre of my work dreams during the mid-noughties. Last month, there was the story of the hedge fund manager from Stonegate who paid South Eastern back £42,550 for his five years of systematic fare evasion in return for them protecting his anonymity.

Sadly, South Eastern’s not unreasonable decision to take the money and keep the identity of the fraudster under wraps gave the media the opportunity to somehow make them out to be more crooked amongst the sanctimonious media moralists than the deceit that perpetrated this story. Poor South Eastern could do no right.

The Stonegate story did, however, reinforce my assertion that you cannot dumb-down revenue protection and it needs to be considered by train operators as a specialist, data-driven resource, not just reliant on high-profile gateline staff acting as manual barriers. From my experience, South Eastern’s revenue protection team has always been top drawer, with the very best skill-set, motivation and leadership, supported by a prosecutions department the envy of most TOCs. However, catching the siphoning snake from Stonegate feels like preventing a terrorist attack – you try and convince yourself that robust, intelligence-led operations are providing ongoing protection, but invariably it is only by stumbling across something suspicious, or an error by the criminal, that something alarming is uncovered, exposing the ultimate inadequacy of our defences. If it is as easy as keeping your head down and touching out on an Oyster reader, how many Stonegate situations are occurring daily across the rail network?

The story goes that the persistent fraud only emerged when the thieving scum was caught out on one journey and then someone at South Eastern had the nous to notice that he soon after purchased a season ticket. That same employee, presumably, decided to track him down and determine what he’d been doing for the previous five years. Worryingly, all this ensued despite South Eastern having decent front-foot protections in place anyway. One legacy of our stewardship of the South Eastern franchise, post-Connex, was to transform the visibility and effectiveness of the conductors, something the Go-Ahead Group has continued.

Disconcertingly, though, despite South Eastern’s revenue protection team’s prowess, it takes an exceptional star within its ranks to uncover Stonegate-style scandals. Across the whole of Britain’s rail network, there probably are only a handful of Poirots and Marples capable of, and determined to, uncover such sophisticated fraud. Most TOCs undertake “revenue at risk” surveys which are unscientific and invariably based on rough averages pertaining to the number of folk found without a ticket during a station block or walk through a train, divided by the average fare evaded (diluted because it is invariably based on swallowing the evader’s claim that s/he boarded at the most recent station!). To what extent does a “Stonegate” skew the figures, how can the figures factor in fraud on a scale such as this? Should an arbitrary sensitivity be applied? Based on the percentage of determined fraudsters per population head, then there must be Stonegate scenarios being replicated or surpassed every day across the rail network?

To test my doomsday scenario, I have recently indulged in some “fare evasion”. Before you send the heavy mob round my door, I did pay my fare, but pretended that I hadn’t, or in one instance accidentally purchased the wrong ticket. The results were alarming. Returning on separate trips from Burton-on-Trent and Leeds to Shepperton, I used the return portion of previously used, but within date, tickets, rather than the ones I had purchased for these specific journeys. Despite having unprofessional hand-written squiggles on them, no one batted an eyelid and I got through the gateline at Waterloo by waving them at disinterested employees. When I told a few folk – decent, well paid, white collar execs, with tickets bought on expenses – they responded with incredulity: “You didn’t work that out? Everyone tries that on and pulls it off!”

A few days later, I inadvertently beat the system. Mistakenly, my PA booked me a Day Travelcard for 5th, instead of 4th, April. So, I spent the day cavorting round London with the next day’s ticket, bemused why gates kept going into “seek assistance” mode, but still ushered through by staff and with conductors turning a blind eye. It was only after my sixth journey that I realised the error and bought a new ticket.

Other irregularities can be achieved with intent – sometimes. I’ve become more brazen lately. Keeping my valid ticket in my pocket, I sneaked through the gates behind another customer at St John’s Wood a few Mondays ago, under the noses of staff, and repeated the feat at Waterloo, Paddington and Kingston in SWT’s backyard, all in the space of a couple of hours.

Then there’s the Railcard “fiddle” – apart from South West Trains at Waterloo, it’s almost unheard of for TOCs to programme their gates so they flag-up tickets purchased with railcards, for closer inspection – 34 times I’ve used my Network Railcard in the past year, purchasing tickets from a machine, not once has the card left my wallet. Meanwhile, SWT’s great value Super Off Peak ticket is an even bigger bargain because although it’s not valid on evening peak journeys from London, I’ve never come across or heard of anyone who has been challenged for travelling at this time.

If Stonegate occurred where ticket inspection is habitually ensuing, then there’s no hope for the swathes of the network where it doesn’t. Many operators’ approach isn’t particularly rounded, often a case of either
on-train or at the station, but rarely in juxtaposition.

Anecdotal evidence suggests more open gates at franchises approaching the demotivating fag-end of their franchise term or in the throes of combative extension negotiations, for whatever reason (at some point, I’ll promise to deliver some stunning consultancy research to reinforce this suspicion). Others, such as East Coast, appear to unashamedly open their gates at Kings Cross because they are confident in the vigilance of their conductors. This can be an astute, cost efficient move – albeit I travelled to Peterborough and back last week without an inspection.

The nadir was reached, however, on Maundy Thursday. I encountered an abrupt Virgin employee at Liverpool Lime Street reacting with suspicion to my questions around departures and Wi-Fi in their “Lounge”. Outside the desk in which he was rooted, an orderly queue had formed, funnelling through a narrow entrance onto the London-bound platform, complete with notices advising of likely ticket inspections. The availability of the member of staff in close proximity, coupled with the physical set-up of the entrance onto the train and customers who by the nature in which they took the decision to queue suggested an expectation for some kind of ticket check. All these factors were willing Virgin to protect their revenue effectively and with consummate ease. Nothing happened, though – not before, during or after our journey. Thrice the cleaners went through the train anxiously clearing rubbish and not once did a conductor appear. On arrival at Euston, instead of checks, a group of Virgin staff turned their backs on customers in animated conversation amongst themselves and with arms draped around each other in a scene more resplendent of an under-18s disco than a high profile, flagship railway station.

So, my quick and dirty litmus test reinforces fears that “Stonegate-gate” is the tip of the iceberg. If the rich are fiddling it big time, let alone the poor and needy, then we’re stuffed. Throw in some internal fraud (don’t kid yourself it isn’t happening, we all know it is) and the railway has a monumental problem. It’s partly about the leadership of train companies. How often do you see the MDs and their senior bods pacing trains and gatelines checking tickets, or throwing the HQ pen-pushers out onto the network for “call to arms”, Revenue Protection Days? In my glory years, I witnessed truly great leaders like Michael Holden and David Franks unleashing their ticket stamps every time they set half a foot on their manor – day, night and at weekends. They sent clear signals to staff and customers that management was deadly serious about ticketless travel.

The media described the Stonegate scandal as the largest fare evasion of all time and it should have provided a wake-up call to an industry in stone-faced denial. Let’s hope so, but for now, I’ll bet you my accidentally twice-used return ticket from Leeds to Shepperton that there are far more whopping hoists ensuing out there – on your train home, all around you even, in the slums and in the shires – widespread looting of an unimaginable magnitude. God help us all.


This article appears inside the latest issue of Passenger Transport.

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