Octopus transaction failures costs customers HK$3.7m

Octopus transaction failures costs customers HK$3.7m

Hong Kong transit payment card operator Octopus wrongly deducted a total of HK$3.7 million from 15,270 customers over the last seven years after a fault in its EFT system resulted in funds being deducted from customers' bank accounts but not credited to their travel passes.

Octopus says the defect stemmed from a fault in the electronic funds transfer module in the add-value machines at MTR stations.

An independent review into the incident conducted by PricewaterhouseCoopers found that around six Octopus transactions out of the ten million conducted each day failed to top up the customer's card, at an average value of HK$240 per user.

The problem was first identified in December 2006 when a series of failed add-value transactions conducted through the electronic payment services (EPS) system were reported. Octopus suspended all EPS add-value transactions at train and metro stations.

In February, the Hong Kong Monetary Authority (HKMA) appointed Andrew Chan Chi-fai as an "advisor" to investigate the fault. The operator also set up a special board committee chaired by independent director, Roger Luk, to look into the matter.

The recently completed PricewaterhouseCoopers review found failed transactions going back to 2000, when records began. A further HK$300,000 was overcharged between 1998 and 2000 but Octopus does not have transaction records for this period and so cannot offer refunds. Instead this money will be donated to charity.

Last month Octopus Holdings CEO, Prudence Chan Bik-wah told reporters EPS add-value transactions will continue to be suspended until the problem is completely resolved.

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