There are multiple variations of the story, appearing on
message boards, blogs, and distributed through email. The most popular text of
the story is as following:
A man living in Newton,
Massachusetts received a bill on his as yet unused credit card stating that he
owed $0.00. He threw it away. In April he received another and tossed that one,
too. The following month the credit card company sent him a nasty note stating
they were going to cancel his card if he didn't send them $0.00.
In retrospect, he probably
should have let them do that. Instead he called the company and was informed
that the problem was the result of a computer error. They told him they'd take
care of it.
The following month he reasoned
that, if other charges appeared on the card, then it would put an end to his
ridiculous predicament. Besides, they assured him the problem would be
resolved. So he presented his card for a purchase. It was declined.
Once again he called. He learned
that the credit card had been cancelled for lack of payment. They apologized
for (here it is again) another computer error and promised they would rectify
the situation.
The next day he got a bill for
$0.00 stating that payment was now overdue. Assuming that this bill was yet
another mistake, he ignored it. But the following month he received yet another
bill for $0.00 stating that he had ten days to pay his account in full or the
company would take necessary steps to recover the debt.
He gave in. He mailed in a check
for $0.00. The computer duly processed it and returned a statement to the
effect that his account was paid in full.
A week later, the man's bank
called him asking him why he wrote a check for $0.00. He explained the problem
at length. The bank replied that the $0.00 check had caused their check
processing software to fail. The bank could not now process ANY checks from ANY
of their customers that day because the check for $0.00 caused a computer
crash.
The following month the man
received a letter from the credit card company claiming that his check had
bounced, that he still owed $0.00 and, unless payment was sent immediately,
they would institute procedures to collect his debt.
This is a funny story, but still a fiction. Financial
experts claim that a zero-dollar check isn't going to cause any financial
institution's computers to crash.
Can $0.00 billings occur? Ask a bookkeeper who has dealt
with a computerized receivables system that generates finance charges but does
not round off the amounts. In a situation where an overdue account has
attracted a finance charge, such bills can occur when the customer pays his
bill. As far as the computer is concerned, a debt of < 1¢ still
exists, so the program sends this information to the printer at statement printing
time. However, because the program has also been coded not to print fractional
cent amounts, it spits out a $0.00 statement.
In the now-vanished world where competent bookkeepers oversaw the receivables process, such oddities were caught before they were mailed out, and a reversing entry to cancel the fractional finance charge was entered to soothe the electronic beast. In the modern world, statements are all too often automatically stuffed into window envelopes, franked, and mailed, and accounting personnel think a reversing entry is something one performs to back into a parking space
In the now-vanished world where competent bookkeepers oversaw the receivables process, such oddities were caught before they were mailed out, and a reversing entry to cancel the fractional finance charge was entered to soothe the electronic beast. In the modern world, statements are all too often automatically stuffed into window envelopes, franked, and mailed, and accounting personnel think a reversing entry is something one performs to back into a parking space
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