Cost of Failure #3: Robodebt - 453,000 People, One Frozen Definition
The algorithm confirmed what the agency needed to be true. AU$565 million in debts simply were never owed.
Between 2015 and 2019, the Australian government ran an automated debt recovery scheme against its own welfare recipients.
Officially it was called the Online Compliance Intervention.
Everyone else called it Robodebt.
By the time it stopped, the scheme had issued debt notices to 453,000 people,
many of them wrong, some to people who owed nothing at all.
It took a Federal Court ruling and a Royal Commission to establish what should have been obvious from the design stage,
the mechanism generating these debts was never lawful.
The auditor confirmed what the institution needed to be true. €1.9Bn simply did not exist.
In September 2018, Wirecard AG joined the DAX 30, Germany’s index of its thirty most valuable listed companies, replacing Commerzbank.
At its peak, the payments processor was worth more than Deutsche Bank.
Investors, regulators, and one of the world’s largest audit firms all agreed, this was one of Europe’s great fintech success stories.
By August 2020, Wirecard was insolvent.
Its CEO was under arrest. Its COO had vanished and remains a fugitive today. €24Bn in market value had been erased within days,
and €1.9Bn the company had reported holding in trustee accounts in the Philippines had never existed at all.
1999. The Post Office deployed Horizon, a new accounting system across its branch network.
By 2015, over 700 sub-postmasters had been prosecuted.
Thousands more accused.
Several died before their convictions were overturned.
The system had bugs. Known bugs.
Bugs that could generate phantom losses with no corresponding cash movement.
Bugs whose existence was not disclosed
in criminal proceedings.