Railway track circuit failures can cause significant train delays and economic losses. A crucial point of the railway operation system is the corrective maintenance process. During this operation, the railway lines have the circulation of trains interrupted in the respective sector, where traffic restoration occurs only after completing the maintenance process. Depending on the cause and length of the track circuit, identifying and solving the problem may take a long time. A tool that assists in track circuit fault detection during an inspection adds agility and efficiency in its restoration and cost reduction. This paper presents a new method, based on frequency domain reflectometry, to diagnose and locate false occupancy failures of track circuits. Initially, simulations are performed considering simplified track circuit approximations to demonstrate the operation of the proposed method, where the fault position is estimated by identifying the null points and through non-linear regression on signal amplitude response. A field test is then carried out in a track circuit approximately 1500 m long to validate the proposed method. The results show that the proposed method can identify and estimate the fault location due to a short circuit between rails with high accuracy.