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 November 19, 1999

Millennium Bug perfect for con artists’ talents, watch for these scams

Quick-buck artists are always with us, but they thrive in a climate of uncertainty. The Y2K situation is a perfect opportunity for swindlers because confusion about the problem is widespread, with experts predicting everything from minor inconvenience with certain types of computer-dependent services to the meltdown of civilization across the globe.

The Y2K issue challenge arose because many computers programmed to recognize only the last two digits of the year might assume that “00” means 1900 and process transactions inaccurately. Although banking is repeatedly cited by experts as the industry best prepared to meet the challenge, scam artists are taking advantage of conflicting messages regarding the problem and targeting bank consumers.

Three major scams have surfaced recently, and like all confidence schemes, they sound just plausible enough to be genuine.

In the first scenario, you receive a phone call from a representative of “your bank.” The caller, however, rarely mentions a financial institution by name. He or she tells you that your bank is having trouble completing its Y2K compliance or validation tests. Until the bugs can be eliminated from the bank’s computer systems, your money must be moved to a “Y2K-proof bond account,” where it will be safe during testing period.

The caller says he or she must have the customer’s permission to transfer the funds, and to prove you are the right person, you must provide such financial data as your account and your personal identification (PIN) numbers. Of course, if you give this information to the scam artist, you run the risk of having your account drained or your line of credit depleted.

The second con game involves your credit card. The caller says your current card will not work after Dec. 31, 1999, but that his or her company will send you a new magnetic strip or sticker that you can attach to your card to bring it into compliance. All that’s required is for you to provide your credit card number — which the caller then uses to run up mega-charges.

The last of the common schemes has several variations. You receive a call or e-mail message saying banks are unprepared for the Year 2000 and that you should remove your funds and give them to the caller for safekeeping or investment. Often the investment is an opportunity to finance a company that has a foolproof Y2K quick fix. Sometimes callers recommend that you give them your money so they can convert it to gold, silver, stocks or others assets.

To keep from being swindled, you should know that:

* Banks and credit card companies already have your account numbers. They don’t need to call you to get them.

* Nearly every United States bank is on target to be ready for the century date change. They’ve been working on the problem for more than three years, and in many cases, the new or repaired software already has been running for several months. If you want to know what your bank is doing about the issue, call your banker directly.

* The safest place for your money is in the bank, where many types of accounts earn interest and are protected by FDIC insurance.

To stop a potential scam in its tracks:

* Arm yourself with information. Read and learn all you can about what the financial services industry is doing to keep your funds safe and accessible. Check your bank’s Web site for updated information. Other helpful Web sites include:

The Federal Trade Commission, www.ftc.gove/bcp/conline/pubs/y2k/y2k-scam.htm; FDIC, www.fdic.gov; The National Fraud Information Center, www.fraud.org/news/menu/htm

* Never give your bank account or credit card numbers to any telemarketer or Internet company unless you have initiated the call or Internet session to purchase a particular product.

* Ask what financial services institution the caller represents. Ask for his or her name and telephone number. Then get in touch with your banker or credit card company to see if the call you received was legitimate.

* Refuse to be bullied. Say you’ve got to think it over and hang up.

Spotting a scam

The caller, who is a stranger to you, nonetheless expresses great concern about your financial well being. After a few minutes of conversation, the caller begins to pump you for personal data — your Social Security number, account numbers, mother’s maiden name or other identifying information. The caller pressures you to act quickly. You must make a decision now or within a very tight time frame. The caller is not interested in answering questions; he or she wants only to close the deal.

If a scam artist has contacted you, call:

Your local law enforcement agency;

Your state attorney general’s fraud division;

Your bank, if the caller has requested confidential banking information.

Kenneth W. Zelie is president and chief executive officer of Norwest Bank, Colorado, N.A. Boulder.

Quick-buck artists are always with us, but they thrive in a climate of uncertainty. The Y2K situation is a perfect opportunity for swindlers because confusion about the problem is widespread, with experts predicting everything from minor inconvenience with certain types of computer-dependent services to the meltdown of civilization across the globe.

The Y2K issue challenge arose because many computers programmed to recognize only the last two digits of the year might assume that “00” means 1900 and process transactions inaccurately. Although banking is repeatedly cited by experts as the industry best prepared to meet the challenge, scam artists are taking advantage…

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