Metro has started an investigation to determined why it is being ripped off by Farecard.

Enterprising subway riders, with the aid of improperly functioning Farecard equipment, have figured out how to take a 90-cent ride for the minimum, 40 cents, a Metro official confirmed yesterday.

"We know it is going on," said Nicholas Roll, Metro's assistant general manager for transit services. "I know I'm losing fares; I have no idea how much money is involved. We have started an investigation. We're going to get it stopped."

Farecard, for those who don't know, is that wallet-sized ticket containing a strip of magnetic tape that Metro riders must use both to enter and to exit the subway stations.

Washington is a city full of people who understand computers, strips of magnetic tape, hardware, software, input, output and interface. Some of them have learned how to beat Facecard, a U.S. Patent Office employee revealed in a telephone call to The Washington Post. Worse, he said conspiratorially, they are telling their friends. He explained how.

Yes, that works," said Roll. "And we don't know why, because it is not supposed to work. We are checking every machine in the system to find out which ones it works on. We are even checking the cards to see if they are faulty."

Helen English, a supervisor for Cubic Western the company that manufactures the Farecard equipment, also conceded that "we're not quite sure what's causing the problem. Metro did order 14 million tickets that are not ours and we're checking them. I think it's just a mechanical adjustment."

Metro's fares are based on distance - the longer the trip, the more it costs. A Farecard can be purchased from vending machines in the stations for any amount between 40 cents and $20.

The rider inserts the card in the entry gate before boarding the train, and the magnetic tape is told the point of entry. The rider retrieves the card. When the rider exits after his trip through another gate, the computer goes to work. It measures the distance traveled, computes the fare, and subtracts the cost of the ride from the ticket and print the remaining value left in the Farecard, ehich is returned to the rider.

Before the red line extension to Silver Spring opened Monday, the most expensive Metro ride was 65 cents - Stadium-Armory to National AIrport during rush hour. Now, however, the trips could be even longer. The rush-hour fare between the airport and Silver Spring is $1. Those who have figured out how to beat the system save 60 cents, one way.

San Francisco's Bay Area Rapid Transit also has Cubic Western fare equipment. No such trouble there, said Michael Healey, BART's public relations officer. "But we did have an interesting situation about a month ago. Some kids found that they could take a 25-cent farecard, insert it into the dollar bill slot on the farecard vending machine, and get a $5farecard in return. We fixed that."