What Product Managers Can Learn From A $100,000 Mistake

by drjim on January 20, 2009

A Product Problem With An Internet Banking Application Cost A Customer US$!00,000

A Product Problem With An Internet Banking Application Cost A Customer US$100,000

As product managers we are generally quite proud of our products. We do our best to work with potential customers and collect requirements. We ride herd over our developers to make sure that a good product is developed and that it rolls out smoothly. What happens if there is then a flaw in how the customer uses the product – are we at fault?

Kai Olsen from the University of Begen wrote an interesting piece that ended up in Computer magazine awhile back about such an incident. This story has a lot to teach us product managers.

It turns out that there was a very ordinary bank customer in Norway who used the Internet to do much of her banking. One day she wanted to transfer a large sum of money (roughly US$100,000) to her daughter. When she keyed in the daughter’s account number during the transfer, she accidentally keyed in one digit too many.

This mistake resulted in the money being sent to an unknown third party who clearly thought that they had won the lottery. This third party promptly proceeded to gamble away much of the money before the police were able to step in and confiscate the remaining part.

Needless to say, this case got a lot of press in Norway. New banking regulations were requested to prevent this kind of slip up in the future. Obviously Internet banking had a lot more risk to it than most people thought.

In this case the end user was wrong – she entered too many digits. Before pressing enter, she could have corrected her error. At the same time, the system also could have caught and corrected her error. This did not happen – the team that built the system had not put such checks into the design.

The specific details around how this error occurred were as follows. The daughter’s account number was 71581555022. The user entered 715815555022. The standard length of a Norwegian account number is only 11 digits so the incorrectly entered account number was truncated to 71581555502.

To make things even more amazing: the last digit in a bank account is a modulo-11 calculated number that should catch single key typing errors and cases in which two numbers have been interchanged. However, due to an unlucky coincidence the number that she typed was a valid account number.

Clearly the end user was very upset about what had happened. She took her case to the Norwegian Complaints Board for Consumers in Banking. She ended up losing her case – they said that she made the error and has to take the responsibility for it.

The user is taking the case to a higher court. She claims that since she typed in 12 digits, it was the responsibility of the system to give her an error message instead of just dropping all digits after the 11th.

As product managers we try our best to create high quality products that will serve our customers well. This case points out a clear failure of a product manger to do this job completely. What went wrong here?

How our customers interact with our product is, if not the most important pat, than at least one of the most important parts of any product. Yes, we’d all like to have a very cool iPod / iPhone like interface that everyone raves about. However, even if we can’t have that, it sure seems like it is a requirement that we have an interface that operates correctly and in a manner that won’t harm our customers.

Who do you think was at fault here – the bank or the customer? Do you think that the bank should give her her money back? Have you ever had a product that had a serious user interface problem? How did you go about resolving it? Leave me a comment and let me know what you are thinking.

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{ 3 comments… read them below or add one }

Lou January 22, 2009 at 2:28 pm

Clearly the bank is at fault here. This woman typed an invalid account number and the transaction should not have processed. As a product manager, I spend quite a bit of time designating use cases and identifying areas where we need to “protect the customer from themselves”. Truncating a number is a convenience for the software not a valid solution.

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Sachendra Yadav February 4, 2009 at 11:44 pm

The bank is obviously at fault. They made an independent decision to truncate the last digit when this decision should have been given to the user. They should have asked the user that they think a wrong number has been entered.

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Dr. Jim Anderson February 5, 2009 at 10:10 am

Sachendra: I completely agree with you. However, it appears as though the banks are in charge of the initial review of the event – of course they would side with the bank! What’s interesting is that for a small settlement, they could have quickly resolved this issue and protected the image of online banking in their country (good marketing).

They’ve decided to take a different path and so we’ll just have to see how this all turns out…

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