LLMHigh
CFPB Reportedly Finds Hello Digit's Automated Savings Algorithm Caused Overdrafts and Orders Redress with $2.7M Penalty
- Occurred
- Aug 10, 2022
- Published
- Aug 10, 2022
- Source
- AI Incident Database
Summary
Hello Digit's automated savings product allegedly transferred funds from users' checking accounts via a proprietary algorithm that reportedly caused overdrafts and bank fees despite a "no overdraft" guarantee. The Consumer Financial Protection Bureau (CFPB) reportedly also found the company denied many reimbursement requests and kept interest earned on customer funds. Hello Digit was ordered to provide redress and pay a $2.7M civil penalty.
Developers
- Hello Digit
- Oportun Financial Corporation
Deployers
- Hello Digit
- Oportun Financial Corporation
Harmed parties
- Hello Digit customers
- Bank account holders enrolled in auto-saves
- Consumers charged overdraft fees due to auto-saves
- Consumers denied overdraft reimbursement
- Consumers whose accrued interest was retained
Classification
Category confidence: 60%
Severity confidence: 90%
Rationale: Algorithmic failure causing financial harm and regulatory penalty, though not explicitly an LLM, fits best under LLM for automated decision systems.
Classifier: Qwen/Qwen3.5-35B-A3B-FP8