Should you believe the bugbusters? (Banks)

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Electronic Telegraph, November 17, 1999

Should you believe the bug busters? The world is unlikely to end on January 1, but Emma Simon advises you take a few precautions in case the banks' systems collapse.

Electronic Telegraph Y2K forum

IT is unlikely that planes will drop out of the sky, microwave ovens explode or the world as we know it will grind to a halt on January 1. But this has not stopped people worrying about the effects of the so-called millennium bug.

In a bid to calm public fears, the Government's "Action 2000" committee has produced a leaflet, being sent to millions of homes over the next few weeks. As most people know, the millennium bug threatens to cause chaos to thousands of computer systems, as they have been programmed to recognise the year by just two digits. The trouble is that, when 99 turns into 00, any computer still operating under the original system will decide it is really 1900 and crash.

Since this glitch came to light, companies have spent billions of pounds reprogramming their systems to recognise four-figure dates - so 1999 can run into 2000 without causing too many problems. However, until we reach January 1, no one can be sure whether all these changes will work.

Although the Action 2000 Committee is keen to reassure home owners that "essential services" - such as the utility groups, hospitals, emergency services and banks - are fully compliant, doubts still persist. And the fact that the Government's leaflet contains advice on "staying healthy over the millennium" is less than reassuring.

A spokeswoman for the Action 2000 Committee says they have been inundated with calls from worried members of the public. At times, the helpline has been registering up to 1,000 calls a day. She said: "Queries vary enormously.

"Obviously many people are worried about their household appliances, and basic services. But we have had people asking whether they should write '00 or 2000 on cheques and whether their mobile phones will work over the holiday weekend."

But one area where there is clear public concern is financial services. Action 2000 say there is a "particular lack of confidence" in the banking and insurance sector, despite repeated reassurance from the Financial Services Authority that all companies are fully compliant. The millennium spokesman for the FSA insists it will be "business as usual" over the New Year. He said: "There will be no widespread disruptions to banking or insurance business."

Others are more pessimistic. Matthew Morris, chief executive of financial advisers Rickman Tooze, said: "Many companies and institutions have completely and utterly failed to appreciate that there is a problem. Even in the best case scenario, there are going to be problems and disruptions. No one contradicts that view."

A former employee of one of the big high street banks said: "Banks are obviously keen to reassure consumers and markets that everything is OK. But they are telling staff privately to make sure they get bank statements printed in the few days before the millennium.

"They have spent billions trying to sort out this problem, but no one is 100 per cent sure that there won't be some glitches. The bankers are looking after themselves, and I think it is important that consumers keep this in mind."

Rickman Tooze has undertaken considerable research into the impact the Y2K bug is likely to have. Talking to experts, Morris says he has found "no consensus" on the likely effects.

But he said: "We have found many very well-informed experts are very pessimistic." John Koshinen, head of the United States' council on Year 2000 conversions, said earlier this year: "There are going to be Y2K failures on New Year's Day."

Financial advisers like Rickman Tooze recommend that consumers keep paper records of investment holdings and bank details. Even though the Action 2000 Committee insists that "your money is as safe as it has always been", we have all known banks and insurance companies to suffer computer problems in the past and "mis-place" customer funds.

James Higgins a director of Chamberlain de Broe, the financial adviser, said: "We have spent the last nine months ensuring we have records of all our customers' bank accounts, insurance policies and photocopies of pass-books and statements. If anything does go wrong, we are in a position to verify customer records with the company concerned."

If there are problems, individuals who have clear, updated records are likely to be dealt with quicker and more efficiently. Higgins said: "Although we are not anticipating widespread disruption, it is always good practice to keep up-to-date records, either on paper or floppy disk. The millennium is as good a reason as any for people to audit their finances and ensure they know how much money they have with different institutions."

Higgins advises people who regularly receive an end-of-year statement or valuation from their stockbroker or investment house to ask for it to be sent for the beginning of December. Roddy Kohn of Kohn Cougar says that investors should get in touch with their financial adviser, bank or investment company to ensure they are fully Y2K-compliant.

He said: "If you keep financial records on home PCs, check the machines and any software you use is compliant. If you're talking to manufacturers or software groups, keep a record of whom you have spoken to. Then, if a problem transpires later, you can prove you were wrongly advised."

-- Old Git (anon@spamproblems.com), November 17, 1999

Answers

re: Keeping Good Records...

(aside--I wonder if there are BAD records? Oh yes, I've got a ton of 'em in my old/odd record collection).

IF things get a bit dicey next year we could use those records for many things...BURN them to keep warm...and EAT them for their cellulose content! They certainly aren't likely to help much in the event of serious problems--BY LAW THEY CAN'T BE USED! Check it out folks--any bank account records in YOUR possesion are irrevelant and specifically forbidden from being used by the federal government. (They fear we may have altered them) We are once again being lied to by the DC beltway bunch.

A general observation: Things used to be simpler, and folks much friendlier (even while disagreeing--they weren't disagreeable!) and stuff usually worked out OK in the end. Isn't it a bit curious that all the truly great advances of the 20th century have brought us to this point in time?...where 'some' of our favorite things (like government services, long distance food & other supply chains and fuels of all kinds) MIGHT be difficult (or at least--very expensive) to obtain for an unknown period of time?

All the endless and mindless polly/doomer rhetoric and debate will be pointless in the end...none of us has that proverbial crystal ball to see into the future..."what will be, will be". If nothing much happens--GREAT--we'll all have a good laugh--hopefully together and not at the expense of each other! If there IS any serious 'unpleasantness' then hopefully there will have been enough preparation done by enough folks to get us through "come what may."

But please, put an end to all the destructive, divisive rhetoric that both 'sides' to this issue have engaged in...IT SERVES NO PURPOSE.

-- (graying@boomer.com), November 18, 1999.


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