Con artists may try to cash in on the Year 2000 problem, but you really may have a problem if you accept their offers. Here's how to spot and stop a Y2K scam.

The Year 2000 computer problem isn't a problem for criminals-it's an opportunity. It's a chance for them to cash in on people's fears about the unknown.

Despite the efforts of the government and the business community to educate the public about the Year 2000 and what's being done to avoid problems, many consumers are wondering how a technical flaw (the potential inability of computers to distinguish the year 2000 from the year 1900) could affect their everyday lives. And when honest people are jittery about a problem they may not fully understand, dishonest people may step in with false or misleading offers to help "fix" things, usually entirely for their benefit.

We don't want to worry you unnecessarily about the potential for Y2K-related scams; chances are that you will never encounter a Y2K con. But we do want to put you on notice about the potential for such frauds.

We also want to remind you that your money is absolutely safe in an FDIC-insured account. But placing your trust, and your money, with a stranger or an unfamiliar company could be a big mistake.

These are the kinds of Y2K-related scams the FDIC and other government agencies believe could become more prominent in the coming months:

-- A con artist posing as a bank employee calls to say that, as part of a Year 2000-related fix of the bank's computers or accounts, you must confirm (actually reveal) your credit card or bank account number. (If a crook gets this or other personal information, he or she can use it to order new credit cards or new checks and then go on a shopping spree.

-- You receive an unsolicited offer to "hold" your money until after January 1, 2000, in a place that's supposedly safer than a federally insured bank, savings institution or credit union, perhaps in a "special" bond or bond account. (The money most likely would just go into the crook's pocket.)

-- A sales person from a company you never heard of calls to suggest that you buy into an investment or business that's free of Year 2000 problems (or will "solve" Y2K problems) and, in addition, is guaranteed to net a big profit. (It's likely that the only one profiting will be the seller, while you get little or nothing in return.)

Although the FDIC hasn't been receiving many reports of Y2K-related financial crimes, Gene Seitz, a fraud specialist with the agency's Division of Supervision in Washington, says activity could pick up later in 1999. "It may be a little early for Y2K frauds to be fully surfacing," he says, "because to be effective the con artists will likely capitalize on any apprehension during the last few months of the year."

A similar view is held by Peter C. Hildreth, President of the North American Securities Administrators Association, whose members include the state and regional regulators in the U.S., Canada and Mexico responsible for protecting consumers from fraudulent investments. "No one knows how big of a deal the Y2K bug will be," Hildreth says. "But panic can lead people to make stupid mistakes-something that con artists know well."

Best Defense Here are four things we want you to know so you can be Y2K-careful: 1. Remember the classic signs of a swindle. The FDIC's Seitz suggests that there are few, if any, "new" frauds stemming from Y2K. "The old schemes have just taken on new twists using the hype over Y2K to try to add some legitimacy to the urgency of their proposals," he says. That's why we remind you about some of the basic "red flags" to financial fraud. In general, we suggest that you hang up the phone or walk away if you get an unsolicited offer with one or more of the following characteristics:

-- The deal seems too good to be true or doesn't seem to make sense. (Why would your credit card company call YOU to verify your card number-shouldn't they know it already? Do you really think your bank would call you when it's testing its computers? Is it truly "safer" to trust your money to a perfect stranger than to your federally insured bank?)

-- The proposal is from an unfamiliar company, often without a street address or direct telephone number.

-- Details about the deal are fuzzy. If you ask for information in writing the person isn't forthcoming.

-- You're asked to give cash, a check or your credit card or bank account number before you receive goods or services. The salesperson also may offer to go to great lengths to collect money.

-- The offer is high pressure or intimidating. He or she won't take no for an answer.

2. Never give account numbers or other personal information unless you initiate the contact.Con artists often pose as business people or law enforcement officers. But unless you originate the contact with some person or company, you should never assume everything is legitimate.

Never give out your Social Security number, bank account or credit card numbers or other personal details to an unknown person or company in response to their unsolicited offer-by phone, fax, mail, the Internet or a knock at the door. A con artist can use this information to withdraw money from your bank account or order new credit cards in your name.

Only give out personal information if it's absolutely necessary, and you initiated the call or transaction involving a company you believe to be reliable. There are some numbers you should never give a stranger, such as the confidential "PIN" number you use to make withdrawals from an ATM.

3. Thoroughly check out any offer to buy or invest in a product or service before you commit to anything. If you're seriously considering an offer of any sort, get as much information as you can before you agree to pay money. But when it comes to Y2K, with so many rumors and sensationalized stories floating around, you should be even more skeptical. Confirm with a reliable source that you do indeed have a problem or that there isn't a better solution. For example, if you're approached about a supposed Y2K problem with your bank account, independently check with your financial institution or its federal regulator. If someone says you need to overhaul your computer, ask your computer manufacturer for another opinion.

Also be sure you're dealing with reputable people. To find out more about a particular company, there are several resources you can tap. The Better Business Bureau in the area where the firm is located is an excellent source of information (including complaints against companies). You can start with your local BBB listed in the phone book or check out the Bureau's home page at www.bbb.org on the Internet.

Or, contact the state Attorney General's office or the state or local consumer protection agency in the area where the company is located and ask about its complaint history.

If you want to research a Y2K-related banking matter or confirm that a particular bank is FDIC-insured, contact the FDIC's Division of Compliance and Consumer Affairs (More Help page) or go to our Web site.

For general help or information on a variety of Y2K issues, call the President's Council on Year 2000 Conversion toll-free at (888) USA-4-Y2K or (888) 872-4925, or consult the Council's www.y2k.gov Internet site.

4. Take the time to spot, and report, a possible fraud. Review your checking account statements and credit card bills as soon as they arrive, to make sure that a swindler hasn't made purchases or ordered a new credit card in your name. Also be on the lookout for these regular mailings; if one doesn't arrive, that could be a sign that someone has changed your billing address for fraudulent purposes. These kinds of precautions are always smart to take, and not just in connection with the Year 2000. Although federal and state laws generally limit certain losses if a thief gets to your bank account or credit card, you may be held responsible if the bank can prove that you were negligent. So keep a watchful eye on your accounts.

If you think you've been victimized by a financial scam or you just suspect something fishy, get to the phone immediately. Call the police. Then call your financial institution. It's also worth calling the National Fraud Information Center at (800) 876-7060 (www.fraud.org on the Internet). The NFIC, a project of the National Consumers League in Washington, forwards reports of suspected crimes to federal and state authorities.

Don't hesitate to make these calls. If you're being approached, chances are others in your community or around the country are being targeted, too.

Final Thoughts Consumer complaints about Y2K frauds may not surface until after the new year begins. That's when crime victims would realize they were cheated out of their money. Don't become one of them. Be skeptical of unsolicited offers. Protect your personal information. And remember that your money is safe in an FDIC-insured account-and far safer than in the hands of a total stranger.

-- Mild Mannered Reporter (Clark@super.duper), June 28, 1999

Answers

Why do I feel like I've just watched an educational documentory (in gym class) on the evils of Marijuana. "And remember that your money is safe in an FDIC insured account-and far safer than in the hands of a total stranger." What sort of mindless nit-wit would turn their 'account' over to a total stranger anyway? The calm, emotionless, baritone commentator's voice was most annoying in those films, as I recall. Always carried that "We know what we're doing, but, we're not sure you do" sort of tone. KMA

-- Will continue (farming@home.com), June 28, 1999.

MMMmmmmwwaaahhhhhh!

-- Andy (2000EOD@prodigy.net), June 28, 1999.

And if the bank-runs are REALLY bad later this year, I wonder how far into the next century it'll be before the FDIC can finish processing all the insured deposits? It just might be a long wait in line. Come to think of it, I don't even know where there is a local branch office of the FDIC where I COULD get in line

-- Roger (pecosrog@earthlink.net), June 28, 1999.

I got a flyer in my monthly bank statement that was worded exactly like the above. I wonder if the FDIC told banks what to say????

DJ

-- DJ (reality@check.com), June 28, 1999.