AI Incident Database

AI-powered mortgage servicing systems at major banks miscalculated payments for over 12,000 homeowners, causing escrow shortages and wrongful fees. The CFPB launched investigations while class action lawsuits were filed seeking damages.

Mass-produced AI-generated music tracks flooded Spotify and other platforms, generating millions in fraudulent royalties through bot-driven streams before detection and removal efforts began.

Microsoft Copilot for Finance generated incorrect financial analyses with fabricated data points and miscalculated ratios. Multiple CFOs reported discovering significant errors in enterprise financial reports that required manual correction.

AI tax preparation software systematically generated incorrect returns for over 150,000 taxpayers, causing widespread financial harm through miscalculated refunds, penalties, and audit exposure during the 2024 filing season.

JPMorgan Chase's AI financial insights tool incorrectly categorized customer transactions and provided flawed budget recommendations, affecting 45,000 customers and leading to poor financial decisions.

AI-powered tax preparation tools including TurboTax made systematic calculation errors during the 2023 filing season, affecting hundreds of thousands of taxpayers with incorrect deductions and credits, leading to IRS investigations and consumer settlements.

AI-powered cryptocurrency trading bots failed catastrophically during the 2022 crypto market crash, executing panic selling and amplifying losses for hundreds of thousands of retail investors who lost an estimated $2 billion.

Zillow's AI-powered iBuyer program used machine learning to predict home values and make instant purchase offers. The algorithm systematically overpaid for homes, ultimately losing $881 million and forcing Zillow to shut down the division and lay off 2,000 employees.

Zillow's AI-powered home buying program lost $881 million after its Zestimate algorithm systematically overpaid for properties, forcing the company to shut down Zillow Offers and lay off 2,000 employees in November 2021.

During the February 2021 Texas winter storm, AI-powered energy trading algorithms contributed to extreme electricity price spikes from $50 to $9,000 per MWh, resulting in $16 billion in excessive charges while millions lost power.

Wirecard's AI-powered risk management systems failed to detect $2.1 billion in fictitious transactions over several years, contributing to one of Europe's largest corporate fraud scandals and the company's collapse in 2020.

DoorDash's AI payment algorithm systematically used customer tips to reduce driver base pay rather than supplement it, affecting approximately 250,000 drivers over two years before being exposed in 2019, resulting in a $2.5M FTC settlement.

Instacart's AI payment system used customer tips to subsidize worker base pay rather than adding them on top, effectively stealing millions from delivery workers until public backlash forced policy changes.

Australia's automated Robodebt system used flawed income averaging algorithms to wrongly demand $1.7 billion from over 500,000 welfare recipients between 2016-2019, causing severe financial distress and contributing to suicides before being declared illegal by a Royal Commission.

Wells Fargo used automated systems to facilitate creation of 3.5 million unauthorized customer accounts between 2009-2016, resulting in $3 billion in regulatory settlements and widespread customer harm.

Knight Capital's trading algorithm malfunctioned on August 1, 2012, executing millions of erroneous stock trades that lost $440 million in 45 minutes, nearly bankrupting the firm and forcing its acquisition by Getco.

JPMorgan's flawed VaR model change in 2012 systematically underestimated trading risk, failing to flag the London Whale's massive positions and contributing to $6.2 billion in losses. The incident resulted in over $920 million in regulatory fines.

On May 6, 2010, algorithmic trading systems caused the Dow Jones to plunge 998 points in minutes, temporarily erasing $1 trillion in market value before recovering. The incident exposed critical vulnerabilities in automated high-frequency trading systems.

The UK Post Office Horizon IT system generated false accounting discrepancies from 1999-2015, leading to over 900 wrongful prosecutions of sub-postmasters for theft and fraud, making it one of the largest miscarriages of justice in British history.

Faulty Fujitsu Horizon IT system caused false accounting shortfalls leading to wrongful prosecution of over 900 UK sub-postmasters between 1999-2015. Described as Britain's largest miscarriage of justice, with ongoing public inquiry and compensation efforts.