Hong Kong smartcard payment provider Octopus, which operates the Hong Kong contactless transit pass akin to London’s Oyster card scheme, has admitted wrongly deducting HK$3.7 million from 15,270 customers over the course of seven years, an independent review has found.  

Octopus said the oversight resulted from a defect in the company’s electronic funds transfer (EFT) module in the top-up machines located at Hong Kong metro stations. The fault caused funds to be deducted from customers’ bank accounts but not credited to their travel pass accounts.

The error was discovered in December 2006 following a series of failed electronic payment top-up transactions, prompting an independent investigation into incident.

The review, which was performed by PricewaterhouseCoopers, found that the failure could be traced back as far as January 2000.

A further HK$300,000 was found to have been overcharged between 1998 and 2000, however Octopus does not have transaction records for this period meaning it is unable to refund affected customers.

The company has said it will donate the funds to charity.

The incident highlights the emergent problems surrounding increasingly prevalent low-cost contactless payment transactions, which often lack detailed audit trails.

For this reason the payment mechanism is more vulnerable to error or wilful fraud, such as 'salami' schemes in which minute sums of money are regularly sliced off a large number of customer accounts for an extended period of time.