CFPB Reportedly Finds Hello Digit's Automated Savings Algorithm Caused Overdrafts and Orders Redress with $2.7M Penalty
Description
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.
Actors
Alleged Deployers
- hello-digit
- oportun-financial-corporation
Alleged Developers
- 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
Risk Domain
AI Safety & FailuresRisk Subdomain
7.3. Lack of capability or robustness
MIT Risk Profile
Topics
Source
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Mitigation Tools
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