Tech rookie put decimal point in wrong place, cost insurer zillions
Colleagues kindly told him error had him marked for death by angry drug cartel
Who, me? Welcome again to “Who, me?”, The Register’s Monday muck-up in which readers recount their worst mistakes.
This week meet “Paul”, who managed to mess up the global insurance industry with a virtual currency.
“The year was 1988,” Paul told Who, me? “I had just left school at 16 and started my first job as a clerical assistant at Lloyds of London.”
Paul was a clever chap and understood computers “so was given a task relating to updating the exchange rates for all currencies” to convert the value of an insurance claim into the currency used by claimants.
The job wasn’t hard, but was complicated by the fact that back in 1988 memory was at a premium so the firm tried not to use all the numerals in very large numbers.
Did you test that? No, I thought you tested it. Now customers have it and it doesn't workREAD MORE
This became a problem for large transactions in currencies like the Italian Lira, which at the time was thousands to the dollar or pound.
Paul told us that an insurance claim for £1m translated to 2,208,236,622.33 Lira!
“The clever programmers came up with a way to handle this by inventing a pseudo-currency called ‘CenLira’,” he told us.
This simple instrument divided a big lot of Lira by 100. Paul’s job was “to divide the exchange rate by 100 and update the system accordingly.”
But Paul put the decimal point in the wrong place, “effectively wiping millions of pounds off the value of the claims.”
This being 1988, the output of the system was processed manually and the volume of transactions - several hundred thousand per day – meant the error went undetected for “almost two weeks.”
But then Lloyds “began to get calls from irate brokers across the globe demanding to know why their claims had been drastically slashed!”
“As if this wasn't bad enough, the only solution available was to restore data prior to my ill-fated update, correctly update the rate of exchange and then have all our brokers work overtime for a full seven days to re-key all the work that had been lost by the restore process.”
Paul was pointedly not asked to join in, but sensed that “everyone in the company at every level were pretty much out for blood! “
“I was terrified that not only was I going to be sacked, but that I would go to prison for what amounted to insurance fraud - basically because the computer operators at the time told me this would happen.”
“They also told me that due to one large Mexican claim being all but wiped out that Mexican drug barons would be after me. At 16 it is strange what you believe!”
Happily, Paul walked away unscathed.
“While there was no hiding from the fact it was my fault, I never got the blame: that fell squarely on to my boss' shoulders for not checking my work!”
What global industry have you messed up with a mistake? Click here to tell us your tale and there’s a decent chance it’ll wind up here on some future Monday. ®