If, for example a mobile device is inoperative and the ticket cannot be displayed a penalty fare can be issued.

Penalty fares are used to discourage casual fare evasion and disregard for the ticketing rules without resorting to (in the case of railways in Great Britain) the drastic and costly step of prosecution under the Regulation of Railways Act 1889 or other laws dealing with theft and fraud.

[2] Penalty fares on the National Rail network are legally based on section 130 of the Railways Act 1993 (c.

[4] Under these rules any passenger found to be without a valid ticket can be issued a penalty fare irrespective of whether it was their intent to travel without paying.

[5] Penalty fares can only be issued by authorised collectors, commonly known as revenue protection inspectors (RPIs), either on the train or at the destination station.

[7] Refusing to do so or providing a false address is a criminal offence under the Railways (Penalty Fares) Regulations 1994.

[8] Penalty fares cannot be issued in some circumstances, including: if passengers were unable to purchase a ticket due to faulty ticket machines or closed ticket offices, if warning notices are not displayed correctly, if the train or station is excluded from a penalty fares scheme, or if the National Rail Conditions of Carriage allow an excess fare to be paid.

[10] Penalty Fares are only operated by certain Train Operating Companies (TOCs), these include C2C, Chiltern Railways, East Midlands Railway, Govia Thameslink Railway (including Southern, Gatwick Express, Thameslink and Great Northern), Greater Anglia, Great Western Railway, Merseyrail, Northern, Southeastern, South Western Railway, Transpennine Express(Excluding Scotland), Transport for Wales (Between Shrewsbury and Birmingham and Carmarthen and Severn Tunnel Junction only) and West Midlands Trains (includes London Northwestern Railway and West Midlands Trains) Some penalty fares schemes include stations with compulsory ticket areas (CTAs), in which people without valid tickets or other authorities may be charged a penalty fare even if they have not travelled and if they do not intend to travel.

These include Amersham, Aylesbury, Beaconsfield, Birmingham Moor Street, Birmingham Snow Hill, Chalfont and Latimer, Chorleywood, Derby, Ealing Broadway, Gerrards Cross, Greenford TfL station, Harrow on the Hill, High Wycombe, Leicester, London Marylebone, London St Pancras, Maidenhead, Nottingham, Rickmansworth, Sheffield, South Ruislip [11][12][13][14] The London Regional Transport (Penalty Fares) Act 1992 and the Greater London Authority Act 1999 allows Transport for London to charge penalty fares under similar but not identical rules to those on National Rail services.

ScotRail, the franchise that operates most of the trains in Scotland, does not issue penalty fares.

ScotRail may collect details and send a bill for a ticket, plus an administration fee,[24] but it rarely does so.

Iarnród Éireann (Irish Rail) issues fixed payment notices on Dublin Area Rapid Transit (DART), Commuter light rail, and InterCity services, per the Railway Safety Act 2005 (Fixed Payment Notice) Regulations 2006.

[25][26] Appeals must be made within 21 days and failure to pay may lead to a criminal conviction and a fine of up to €1,000 plus the cost of the unpaid fare.

[27] In 2014, fixed penalty notices were issued to 9,885 fare evaders, of which 356 were prosecuted in the District Court.

[30] Main operators of urban transport usually use the maximum penalty as the basic variant, although a bit belatedly.

Usually, operators offer a penalty reduction for passengers: Since 23 October 2017, Prague announced a special 50 percent penalty discount for such fare dodgers who will additionally purchase an all-year network ticket, and the action continues for 2018 and in January 2019, this measure has become permanent.

[35] If the penalty is not paid immediately, the passenger is required to produce valid identification documents.

Germany's principal InterCity TOC, DB Fernverkehr, introduced a penalty fare scheme in 2022.

[36] The penalty fare for passengers without lacking or holding invalid tickets on the Philippine National Railways' Metro Commuter Line is the maximum fare (PHP 30.00 in the Manila-Alabang route and PHP 60.00 in the Manila-Calamba route).

The penalty fare on the Budapest Metro is set at 25,000 forint (12,000 if paid on the spot).

In the New York metropolitan area, tickets sold on board the Long Island Rail Road and the Metro-North Railroad, as well as on New Jersey Transit trains, carry a surcharge.

On most local bus and rail systems, failure to purchase a ticket in advance is considered "fare evasion" which can result in a citation with a fine ranging from $100 to $500 depending on the jurisdiction.

Otherwise more serious penalties may apply for jumping turnstiles or otherwise evading fare collection systems.