Commonwealth Bank of Australia Tries to Explain Coding Errors Found After 4 Years
The coding errors were created in July 2011 when the bank introduced an automated decision tool to process customer overdraft applications, but the problems weren’t discovered until September 2015. During the calculations that decided whether a customer could actually afford an overdraft, one software error in the decision tool’s algorithm failed to count a customer’s rental expenses, while another error accessed a wrong data field that was used for determining a customer’s overall household expenditures. The result was that a customer’s true expenses where likely underestimated or under-assessed.
The Australian Securities and Investments Commission (ASIC) fined the bank AU $180,000 for the coding errors on top of the AU $2.5 million the bank had to write off in customer loan balances.