The City of Edmonton is on the hook for $45,000 in lost revenue because of fraudulent transactions involving a malfunctioning smart fare machine used within the public transit system.<\/p>\n
Those details were made public in the city auditor\u2019s annual report for 2025 and discussed during Friday\u2019s audit committee meeting.<\/p>\n
The city auditor\u2019s office was informed that an estimated $65,000 in fraudulent transactions were conducted at the faulty machine.<\/p>\n
The transactions were committed by an unknown number of people from September 2024 until the issue was discovered by the city on June 13, 2025 and reported to the Edmonton Police Service.<\/p>\n
Over 300 suspicious Arc cards were identified and blocked with about $20,000 remaining on them, which the city said it was able to recover.<\/p>\n
The Edmonton Transit Service said it has \u201creinforced control procedures to prevent future incidents.\u201d<\/p>\n
Scant details were available during Friday\u2019s audit committee meeting with part of the session held in private.<\/p>\n
The city\u2019s mayor and councillors are not allowed to disclose what is discussed in private sessions.<\/p>\n
\u201cThere are no rider-related risks to the security of Arc cards,\u201d Carrie Hotton-MacDonald, ETS\u2019 branch manager, said in a statement to CBC News.<\/p>\n
Committee vice-chair and Ward Ipiihkoohkanipiaohtsi Coun. Jon Morgan put forward a motion to have administration provide a confidential memo on the actions they took to address weaknesses identified in the auditor\u2019s report.<\/p>\n
The motion passed unanimously.<\/p>\n
Ward Anirniq Coun. Erin Rutherford said it’s important to get a full accounting of what has been done by administration to address any system vulnerabilities.<\/p>\n
\u201c[It\u2019s important] that there is some follow-through on those risks, and that those risk gaps are closed, and that we have validation that they are closed,\u201d she said.<\/p>\n
City administration said the loss represents a small portion of the city\u2019s transit revenue which is about $120 million per year.<\/p>\n
\u201cFraudulent activity can happen in any organization, any business, and what’s really important is to have the processes in order to actually find them out,\u201d Ward sipiwiyiniwak Coun. Thu Parmar said in an interview with CBC News.<\/p>\n
\u201cI want to assure Edmontonians that \u2026 every dollar matters.\u201d<\/p>\n
In a statement to CBC News, EPS said it was contacted by transit security about suspicious activity involving Arc card reloads happening over several months.<\/p>\n
Investigative efforts to identify suspects have been unsuccessful so far, noted EPS spokesperson Nancy Carlson.<\/p>\n
She added there is no indication that there is a connection to organized crime.<\/p>\n
Karim Jamal, chair of the University of Alberta\u2019s\u00a0department of accounting and business analytics, said the nature of this kind of fraud isn\u2019t particularly sophisticated.<\/p>\n
\u201cIt’s not the mafia or something,\u201d he said in an interview with CBC News.<\/p>\n
\u201cThey wouldn’t get involved in a scheme for $45,000 or $50,000, so these are more just average people probably.\u201d<\/p>\n
Jamal said it will be important for the City of Edmonton to ensure rigorous testing for its machines.<\/p>\n
\u201cThe city will have to be careful not to leave these kinds of holes in their machine, because if there is one, these guys are really good at exploiting that, and in a very short period of time, they can do some damage to you,\u201d he said.<\/p>\n
Lawyer Anny Wang with Boisvert Wang LLP said a crime like this would be difficult to prosecute.<\/p>\n
\u201cThe amount of manpower it would take to identify a great number of people involved, and then for the police resources to be used in comparison to each individual transaction \u2014 if they’re very low value, it’s unlikely for resources to be devoted to that.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The City of Edmonton is on the hook for $45,000 in lost revenue because of fraudulent transactions involving…\n","protected":false},"author":2,"featured_media":596168,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[194294],"tags":[49,48,226231,226233,105143,23752,17443,226232,226229,226234,226230],"class_list":["post-596167","post","type-post","status-publish","format-standard","has-post-thumbnail","category-edmonton","tag-ca","tag-canada","tag-city-administration","tag-city-auditor","tag-city-of-edmonton","tag-edmonton","tag-edmonton-police-service","tag-edmonton-transit-service","tag-fraudulent-transactions","tag-public-transit-system","tag-ward-ipiihkoohkanipiaohtsi-coun"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/596167","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=596167"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/596167\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/596168"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=596167"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=596167"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=596167"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}