"If you don't touch in and touch out with your Oyster card, you will be charged the maximum fare". This is the new rule implemented by TfL in November 2006 to ensure that people are paying the correct fare on the UndergrounD.
I have inadvertantly validated that they do in fact charge the maximum fare, returning home one day last month, all of the turnstiles at the South Kensington station were marked with a big red X and were open. Not sure how to touch in (I actually DID touch the Oyster card to the reader, but it wasn't read, due to the thing causing the big red X), I, along with hundreds or thousands of others walked through. Touching out at Putney Bridge, I saw a £4.00 deduction rather than the normal £2.00. So I paid £2.00 for science. It is not worth my time to complain to TfL (though worth it to blog about)
The problem with this system is that it assumes the system is perfect. Now this is TfL's UndergrounD, we know quite well the system is far from perfect, my estimate is that a given line has problems between 10% and 20% of the time.
The turnstiles have many of the same maintenance issue writ small. The reader can be down, even when it is up, there is no visual feedback that your card was read on many readers (the light/LED behind the green "Enter" sign is out), and the auditory feedback is impossible to detect in a crowded, noisy station. When I exit, Putney Bridge's turnstile tells me how much is left, not all turnstiles do. When I enter or exit at South Kensington, the gates are open from the previous person who touched in or paid by ticked.
Another problem is the maximum fare rule. If I have already spent a lot on public transport today, or if I have an unlimited use pass, touching in and out really don't matter (I assume, I have not tested this).
Is there a better solution? Clearly charging the minimum fare would encourage abuse.
Comparison with the same users daily travel patterns could be used to detect anomolies, but creates its own difficulties, and does not guarantee fairness as people may change patterns from day to day.
A single flat fare (as on buses) would avoid this problem, but would of course favor long over short trips. It also defeats the whole point of having smart cards, since a much simpler technology could be used to collect money.
A more reliabile ticketing/turnstile system would help, but may also slow down travelers (closing the gate quickly after a passenger goes through, delaying the next passenger as the gate must reopen). This is of course the better solution.