An extra line meant to be "dormant" for now caused Chemical Bank to deduct
twice any amount its customers withdrew from ATM machines Tuesday night and
Wednesday. However, they received praise from the state consumer board for
their prompt and open response to the problem.
My information comes from articles in The New York Times, 18 Feb 1994, p. A1
and 19 Feb 1994, p. C1. The new line of code was part of a year-long effort
to add functionality to ATM machines. It sent a copy of the ATM withdrawal to
a different computer system (the one that handles paper checks), which then
deducted the money a second time. This second system is only run overnight,
so the problem was not detected until Thursday morning.
About 430 checks were bounced incorrectly as a result, but Chemical contacted
the customers affected, and offered to pay any charges they incur, or write
letters of explanation to the recipients of the checks. The NY state consumer
board has also asked them to refund any fees for the ATM transactions which
were completed incorrectly.
There were about 150k ATM transactions incorrectly doubled, amounting to $15M.
(Last year in the US there were 7G ATM transactions averaging $50, according
to The NYT article.)
Steven Bloom, who runs a consulting firm in NJ said: "There are similar
episodes that take place all the time, but we never hear about them because
the bank is able to get the accounts straight before it opens its doors in the
morning. The problem in this case is the ATM system is highly visible and
runs 24 hours a day, seven days a week."
-John Sullivan@geom.umn.edu
[Also noted by
Linn H. Stanton ,
Mark Bergman ,
Jeremy Epstein ,
"Greg D." , and PGN.
I took John's version because his version was the
most Digest-able, although not entirely consistent with the others.
Further sources included the following clips:]
In one of the biggest computer errors in banking history, Chemical
Bank mistakenly deducted about $15 million from more than 100,000
customers' accounts on Tuesday night, causing panic and consternation
among its customers around the New York area.
The mistake affected 150,000 transactions from Tuesday night
through Wednesday afternoon. Some checks were bounced Thursday
morning as a result, although the bank said the number was small.
[The New York Times, Friday 18 Feb 1994]
Millions of dollars vanished from New Yorkers' bank balances
Wednesday, when a computer deducted $2 from accounts for every $1
withdrawn from automated teller machines." [...]
Sean Kennedy, president of the Electronic Funds Transfer Association
(a trade group) said "I'm beginning to learn that it does happen from
time to time [and] usually it's a software error".
[The Washington Post, 18 Feb 1994, from Jeremy Epstein]]
Customers stormed into Chemical Banking Corp's branch offices to
complain of empty accounts and bounced cheques after a computer glitch
affected at least 70,000 of the bank's approximately one million
customers.
[The Financial Post, a Canadian business paper, from Greg D.] [sullivan@msri.org (John Sullivan) via risks-digest Volume 15, Issue 57]
3:55
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