"My account is off $10," "It doesn't add up," "My checkbook won't balance." A few calls of this type are normal on any given day, but the phones were jammed with customer complaints. Hun- dreds of calls streamed in constantly and hundreds more never got through the busy signals. Dozens of customers came into the local branches to complain about the errors on their statement.
An emergency meeting was held in the Peachtree Street headquar- ters of First Federal. The president of the bank chaired the meeting. The basic question was, What Was Going On? It was a free for all. Any ideas, shoot 'em out.
How many calls? About 4500 and still coming in. What are the dates of the statements? So far within a couple of days, but who knows what we'll find. What are you asking people to do? Double check against their actual checks instead of the register. Do you really think that 5000 people wake up one morning and all make the same mistakes? Do you have any other ideas? Then what? If they don't reconcile, bring 'em in and we'll pull the fiche.
What do the computer people say? They think there may be an error. That's bright. If the numbers are adding up wrong, how do we balance? Have no idea. Do they add up in our favor? Not always. Maybe 50/50 so far. Can we fix it? Yes. When? I don't know yet. Get some answers. Fast. Yessir.
The bank's concerns mounted when their larger customers found discrepancies in the thousands and tens of thousands of dollars. As the number of complaints numbered well over 10,000 by noon, First Federal was facing a crisis. The bank's figures in no way jived with their customer's records and the finger pointing began.
The officers contacted the Federal Reserve Board and notified them. The Board suggested, strongly, that the bank close for the remainder of the day and sort it out before it got worse. First Federal did close, under the guise of installing a new computer system, a lie that might also cover whatever screwed up the statements. Keep that option open. They kept answering the phones, piling up the complaints and discovering that thus far there was no pattern to the errors.
By mid-afternoon, they at least knew what to look for. On every statement a few checks were listed with the incorrect amounts and therefore the balance was wrong. For all intent and purpose, the bank had absolutely no idea whose money was whose.
Working into the night the bank found that all ledgers balanced, but still the amounts in the accounts were wrong. What are the odds of a computer making thousands of errors and having them all balance out to a net zero difference? Statistically it was impossible, and that meant someone altered the amounts on pur- pose. By midnight they found that the source of the error was probably in the control code of the bank's central computing center.
First Federal Bank did not open for business Thursday. Or Fri- day.
First Federal Bank was not the only bank to experience profound difficulties with it's customers. Similar complaints closed down Farmer's Bank in Des Moines, Iowa, Lake City Bank in Chicago, First Trade in New York City, Sopporo Bank in San Francisco, Pilgrim's Trust in Boston and, as the Federal Reserve Bank would discover, another hundred or so banks in almost every state.