For educational purposes only!

I have been spending less time trying to help others out lately for exactly this reason, the lack of reason, a treason of reason if you will. But, sometimes I forget that any recent GI will need to justify her/his stand on preps to family and loved ones. This is or can be a daunting task without enough bullets to shoot down the naysayers of potential disruptions. The more ammo the better soooo...

Y2K repair leaves cash machines on the blink

Up to 5 percent of the nation's ATMs temporarily malfunction after a company upgrades its system for the year 2000

Wednesday, July 28, 1999

By Steve Woodward of The Oregonian staff

A software glitch rattled up to 5 percent of the nation's automated teller machines for more than two weeks earlier this month. The glitch resulted in failed machines, slow transactions and incorrect bank balances for tens of thousands of ATM transactions.

The mistakes occurred after a little-known Texas company in late June finished installing a new computer system designed to process ATM transactions properly in the year 2000.

"We don't take it lightly," said T.G. "Tim" Connor, president of the financial industry group of Affiliated Computer Services Inc., a $1 billion-a-year Dallas company that processes 20 million ATM transactions each month.

The problem follows repeated assurances from the federal government that ATM terminals are expected to work normally after the year 2000 calendar rollover.

Affiliated Computer Services employees are still working to repair faulty accounting that occurred sporadically between late June and mid-July. The amount of incorrectly credited money has not been determined.

"We aren't dealing with hundreds of thousands of dollars," Connor said.

ACS executives said the software problems, which were not actual Y2K-related date problems, have been resolved. The machines affected by the glitch and current transactions are proceeding normally.

The glitch affected as many as half of the 17,000 ATM terminals for which Affiliated Computer provides transaction processing. Those terminals are located largely in merchant locations, such as convenience stores, bowling alleys and fast-food restaurants.

Jim Welsh, owner of Manzanita Fresh Foods on the Oregon coast, first noticed something was awry on June 26, when a discrepancy between the in-store ATM he leases and his bank statement popped up for the first time in his 11-year experience with the machines.

Welsh's ATM reported that $1,180 in cash had been withdrawn. U.S. Bank, where Welsh banks, said $1,400 had been withdrawn.

And so it went for 17 days -- sometimes in Welsh's favor, sometimes against. By July 13, when his accounts began reconciling properly again, he was $237 ahead.

"Even on July 1, my machine was down the whole day, and they still put $180 in my account," Welsh said.

When the problems began, Welsh had never heard of Affiliated Computer Services. He leases his ATM from Evergreen Teller Services of Grass Valley, Calif., the nation's second-largest operator of nonbank ATM terminals. (The largest is Card Capture Services Inc., based in Portland.)

Evergreen, in turn, contracts with ACS, one of 10 major ATM transaction processors in the United States.

All ATM processors were required by federal regulators to be Y2K-compliant by June 30, meaning that their computer systems had to be able to process dates in the year 2000 and beyond. ACS began installing a new operating system in January, upgrading an old system that was not able to properly process dates beyond 1999. The company had been moving terminals systematically onto the new system without incident, until it moved the last of the terminals on the last weekend in June.

At that point, some machines broke down, stalled or rejected cardholders' requests. Other cardholders received the proper amount of cash from the machine, but the bank accounts were wrong.

The problems were isolated to terminals that used a certain kind of device "driver" and high-speed, dial-up connections with ACS, said Joni Floyd, the executive vice president in charge of the project. The sudden influx of 17,000 ATM terminals, 3.5 million cardholders and a transaction rate of 20 million per month exposed weak points in the new software, Floyd said.

Connor said ACS had set up a testing laboratory with more than 15 types of ATM terminals but acknowledged that lab testing can't find every potential problem.

"Until you can touch every single terminal out there," he said, "you can't test every conceivable transaction out there."

The glitch also affected terminals operated by Card Capture Services. The company intends to reimburse merchants who lost ATM fee income while their terminals broke down, David G. Grano, president and chief executive officer, said through a spokeswoman. Card Capture, which operates more than 7,000 terminals nationwide, will base the reimbursements on the average daily number of transactions per machine.

Although some Card Capture machines had problems, the Portland ATM operator apparently was not affected by accounting problems, the spokeswoman said. Individual cardholders must resolve account discrepancies with the institutions that issued their cards, ACS's Floyd said.

You can reach Steve Woodward at 503-294-5134 or by e-mail at stevewoodward@news.oregonian.com.

-- Michael (mikeymac@uswest.net), July 29, 1999

Answers

Some interesting spins here: ACS executives said the software problems, which were not actual Y2K-related date problems, have been resolved.

Now, to me, if the software is modified because it is not y2k compliant and the glitch appears after the modification, then the problem has been caused by Y2K related changes. Expect more of this.

and, Connor said ACS had set up a testing laboratory with more than 15 types of ATM terminals but acknowledged that lab testing can't find every potential problem.

"Until you can touch every single terminal out there," he said, "you can't test every conceivable transaction out there."

But, how many banks will report compliance based on minimal lab testing?

-- de (delewis@Xinetone.net), July 29, 1999.

Who cares about ATM machines. I think this is one area where we really can go back to manual. If I have to go to a branch, or even wait 20-30 minutes to make a transaction, so what. The real worry is whether or not the funds are being handled correctly "behind the scenes" and even more important, the impact of failures in other sectors on the financial industry. Here I'm not talking so much about infrastructure failures (electricity/telcomms), but restricted cash flows, business failures, social responses, etc.

The whole ATM issue is, to me, a straw man on the level of VCR worries and planes falling out of the sky.

-- Jim (x@x.x), July 29, 1999.