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.
Editor Notes: Timeline note: The CFPB published their notice on 08/10/2022. The incident was added to the AIID on 10/04/2025.
Entities
View all entitiesAlleged: Hello Digit , Oportun Financial Corporation , Hello Digit automated savings algorithm , Hello Digit auto-save transfer scheduling/decision engine and Hello Digit proprietary checking-account analysis model developed and deployed an AI system, which harmed Hello Digit customers , Bank account holders enrolled in auto-saves , Consumers charged overdraft fees due to auto-saves , Consumers denied overdraft reimbursement and Consumers whose accrued interest was retained.
Alleged implicated AI systems: Hello Digit automated savings algorithm , Hello Digit auto-save transfer scheduling/decision engine and Hello Digit proprietary checking-account analysis model
Incident Stats
Risk Subdomain
A further 23 subdomains create an accessible and understandable classification of hazards and harms associated with AI
7.3. Lack of capability or robustness
Risk Domain
The Domain Taxonomy of AI Risks classifies risks into seven AI risk domains: (1) Discrimination & toxicity, (2) Privacy & security, (3) Misinformation, (4) Malicious actors & misuse, (5) Human-computer interaction, (6) Socioeconomic & environmental harms, and (7) AI system safety, failures & limitations.
- AI system safety, failures, and limitations
Entity
Which, if any, entity is presented as the main cause of the risk
AI
Timing
The stage in the AI lifecycle at which the risk is presented as occurring
Post-deployment
Intent
Whether the risk is presented as occurring as an expected or unexpected outcome from pursuing a goal
Unintentional
Incident Reports
Reports Timeline
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WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) is taking action against Hello Digit, LLC, a financial technology company that used a faulty algorithm that caused overdrafts and overdraft penalties for customers. Hello Di…
Variants
A "variant" is an AI incident similar to a known case—it has the same causes, harms, and AI system. Instead of listing it separately, we group it under the first reported incident. Unlike other incidents, variants do not need to have been reported outside the AIID. Learn more from the research paper.
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