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HSBC faces legal action for millennium bug glitch Source: Evening Standard - London

HSBC BANK faces legal action unless it offers hundreds of thousands of pounds in compensation to retailers affected by a millennium bug failure at Christmas.

Thousands of credit card swipe machines were disabled when they failed to recognise the year 2000, causing long delays for shoppers, who were unable to pay for goods, and lost revenue for small shops.

Solicitor Graham Ross, vice chairman of the Y2K Lawyers Association, is threatening to sue HSBC unless the bank agrees a voluntary compensation scheme for the Racal swipe machines it supplied to retailers he is representing.

Mr Ross, who has 50 clients seeking compensation, said that all he wanted at this stage was a meeting with HSBC. "I'm not necessarily saying that HSBC is ultimately responsible, but I believe they will want to act responsibly and reasonably to ensure no retailer will suffer financially," he said.

While larger companies could afford to ride out or avoid the bug, it was not the same story for smaller firms, Mr Ross said.

"There has always been the danger that Y2K will result in costs being picked up by small and medium-sized firms to the advantage of larger organisations."

The problem on 27 December stemmed from a software glitch in 14,000 machines made by the electronics giant Racal and supplied by HSBC. Another 6,000 machines supplied by Racal to other banks were also affected. Mr Ross claimed that Racal had failed to tell retailers of a code they could have inputted into the machines to resolve the problem. In addition, HSBC appeared to have failed to test the machines, he said.

A spokesman for HSBC said it was not aware of any legal proceedings but was taking the matter "very seriously". However, the spokesman added that HSBC had received "relatively few customer complaints" from its 10,000 retailers. Racal said that a "simple fix" had been introduced to ensure that the problem did not continue into 2000 and added that any problems arising with HSBC would be "resolved amicably".

Publication date: Jan 28, 2000

-- Martin Thompson (, February 02, 2000

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