Hello Digit fined $2.7M for faulty automated savings algorithm
The CFPB penalized Hello Digit for deploying an automated savings tool that caused overdrafts, despite a no-overdraft guarantee. The agency ordered a civil penalty of $2.7 million and required redress to affected consumers; it also alleged that the company kept interest earned on consumer funds.
The algorithm routinely triggered overdrafts while the company guaranteed it would never transfer more than a user could afford.
Key facts
- What
- The CFPB penalized Hello Digit for deploying an automated savings tool that caused overdrafts, despite a no-overdraft guarantee.
- Incident date
- Aug 10, 2022
- Who
- Hello Digit, LLC
- Failure mode
- Tool Misuse
- AI surface
- Chatbot
- Severity
- Medium
What happened
The CFPB found that Hello Digit's automated-savings tool routinely caused consumers' checking accounts to overdraft, despite the company's no-overdraft guarantee. The regulator ordered a $2.7 million civil penalty and redress to affected consumers. The agency also alleged that the company retained interest earned on consumer funds.
What broke inside the model
- 01 · TriggerThe agent selects the correct tool.
- 02 · Model stepIt fills the call with the wrong arguments.
- 03 · Control gapNo validation checks the arguments first.
- 04 · FailureThe tool runs against the wrong target.
- 05 · ConsequenceThe wrong record, account, or system is hit.
At the tool call, the arguments point at the wrong target.
The proprietary algorithm used to calculate auto-saves failed to accurately determine the funds available in a consumer's account, causing transfers that exceeded balances and contradicting the stated safety constraints.
What it cost
Sources
- PrimaryHello Digit, LLC | Consumer Financial Protection Bureauconsumerfinance.gov
- PressCFPB fines fintech Digit $2.7M over 'faulty algorithm' overdraftbankingdive.com
- PressHello Digit fined $2.7m after algo caused customers overdraft feesfinextra.com
Cite this entry
https://failureindex.ai/failures/hello-digit-fined-faulty-automated-savingsAI Failure Index. "Hello Digit fined $2.7M for faulty automated savings algorithm" (FI-0221). Realm Labs. https://failureindex.ai/failures/hello-digit-fined-faulty-automated-savings (indexed Jun 5, 2026).Data fields CC-BY 4.0, prose citation permitted. Incident ID FI-0221. Full dataset at /data.
Note from Realm Labs, the Index steward
How Realm would have caught this
- OmniGuard
- AgentRealm
Realm can inspect a tool call against the user's actual intent before it runs, and hold calls whose arguments or target do not match what was asked, so the wrong tool or the wrong arguments never reach the system of record.