Blame, Fraud, Scams : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Who is to blame? This forum has talked about it, and the courts apparently will grapple with this extensively. Some ppl claim that Y2K is all a scam, a hoax, to bamboozle the techno-gullible out of their $$. In fact, that is a prevalent argument of those who want to blow it off as an unnecessary concern.

Here is an article that reoriented me to the reality of the money and festering resentment building up around Y2K. Anything that attracts so much money can't be just smoke and mirrors, can it? ??

December 9, 1998, Duluth Minnesota Opinion

Who's To Blame In Y2K Failings?

NEW YORK -- The pressure is on. Become year-2000 compliant or risk a cataclysmic failure of the systems on which you depend for the success of your business, the medical devices on which you depend for the well-being of your patients or the computers on which you depend for your everyday life.

Depending on your profession, you may also face the wrath of the Securities Exchange Commission, the Health Care Financing Authority, your vendors or your customers if you fail to become year-2000, orY2K compliant.

So you purchase upgrades and replacement products from manufacturers and vendors all too willing to sell you a solution, at considerable cost, to the so-called Y2K bug.

The Gartner Group, a leading Y2K research firm based in Stamford, Conn., has estimated the cost of compliance worldwide at $300 billion to $600 billion.

New York-based Citigroup Inc. has reported it expects to spend about $600 million to become year-2000 compliant, while Connecticut-based General Electric Co. has said it will cost $550 million to free itself of the Y2K bug.

Must these and other businesses, as well as hospitals and individuals incurring these monumental costs, bear sole responsibility? Not necessarily.

Many of the noncompliant software and hardware products were sold by software and electronics manufacturers in the last few years. Yet these manufacturers have been aware of the looming year-2000 problem for some time.

Having sold noncompliant products with the knowledge that they will fail on Jan. 1, 2000, the producers of these products -- not the purchasers -- ought to bear responsibility for the cost of repair or replacement. Many manufacturers have recognized this responsibility and offered free ``patch'' kits and upgrades.

But other manufacturers have sought to force purchasers of their products to turn around and purchase Y2K ``patches'' or new versions -- and often at considerable cost.

Since the spring of this year, a number of lawsuits have challenged this practice. Among the targets are software manufacturers such as Medical Manager Corp. of Tampa, Fla.; Quarterdeck Corp. of Marina del Rey, Calif.; Macola Inc. of Marion, Ohio; Symantec Corp. of Cupertino, Calif.; Synchronics Inc. of Germantown, Tenn.; Active Voice Corp. of Seattle; and Intuit Inc. of Mountain View, Calif.

At issue in these cases is the well-entrenched industry practice of forcing customers to buy upgrade after upgrade by adding new features to products and by discontinuing support for all prior versions. For a variety of reasons -- including cost and a lack of a demonstrable need for new features -- users may have no interest in purchasing the latest upgrade. Indeed, we are all aware of businesses and individuals using software versions and hardware products the manufacturer is no longer selling.

With the imminent arrival of the year 2000, the ability to decide whether to purchase the latest upgrade has been taken away.

Irrespective of a need for the latest version, businesses and individuals are being asked to incur costs, sometimes approaching the cost of their initial investment, to become Y2K compliant.

A unique profit opportunity has therefore taken root and is now flourishing at the expense of users of products that are not year-2000 compliant.
These users, however, are not powerless. As noted, a number of lawsuits are challenging this practice.

In these actions, the plaintiffs have claimed that the noncompliant product was defective when sold and that sale of the defective product, or a failure to provide a free Y2K solution, violated the express or implied warranties made at the time of sale. (Many express warranties specifically obligate the manufacturer to repair or replace a defective product with a nondefective one.)

Manufacturers have also been accused of engaging in deceptive or unfair trade practices for selling noncompliant products without disclosure to the purchaser. Claims for fraud have been asserted in some of these court actions.

The success of these claims may depend on the reasonably expected useful life of the product at the time of sale. In cases where the product could reasonably have been anticipated to be in use in the next millennium, success in such a court action is greatly enhanced. The timing of a company's efforts to create a Y2K-compliant version of a product is relevant. Clearly, a company that is creating a compliant version, but which conceals this from purchasers of the noncompliant version, acts at its peril.

Similarly, a company that is dealing with year-2000 issues affecting its own internal systems is also exposed if it still sells products that are not year-2000 compliant.

The stage is set to determine who should bear responsibility for the multibillion-dollar effort now under way on behalf of companies and individuals to become year-2000 compliant.

How the battle between purchasers and sellers of non-Y2K compliant products will play out will initially be decided by the courts, which have not yet reached the ultimate issue presented in the cases filed to date.

Given the growing awareness of this issue over the past decade, purchasers of these products should ultimately prevail in shifting at least a part of the cost of year-2000 compliance to the sellers.

Klafter is a lawyer and a member of the Practicing Law Institute's faculty on year-2000 issues.


-- Leska (, December 10, 1998


Maybe it will happen sooner than the general populace thinks.

Copyright 1998 COMLINE News Service, December 9, 1998

HEADLINE: Electronics Industry Warn of Imminent 1999 Computer Bug

The Japan Electronic Industry Development Association issued a warning December 8 that a programming glitch may cause many computer programs to fail on and after January 1, 1999, a bug completely separate from the more widely known Year 2000 problem. Older programs dating back to the seventies sometimes use '99' to indicate 'end of data' of 'date unknown'. Such programs will not recognize the two digits as significant of a year and will prevent users from entering order or sales data or could cause data to be lost. The association, whose members include leading computer manufacturers, advises users to have their computers checked for the bug.

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-- Leska (, December 10, 1998.

$$$ rising

Reuters, WASHINGTON - The Clinton administration Tuesday said ridding U.S. federal agency computers of the dreaded millennium bug will cost $6.4 billion, up from a $5.4 billion estimate made three months ago.

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-- Leska (, December 10, 1998.

Tying up the courts with Y2K lawsuits doesn't fix the problems, in time, nor get people prepared. It does, however, keep the lawyers busy. Tee, hee.


-- Diane J. Squire (, December 11, 1998.

Cincinnati Financial Sues Over Y2K Coverage
By Reuters, December 9, 1998, 5:55 a.m. PT

Cincinnati Insurance has filed a complaint in federal court in what may be the first action concerning an insurance company's Year 2000 obligations, according to a litigation newsletter.

.... The hospital maintains that Source Data Systems pledged that a $570,000 computer system installed in 1995 and 1996 would be Year 2000 compliant.

But, Pineville said, promised repairs were never completed. Pineville said it now must install a new system estimated to cost $750,000 to $1.25 million, according to Mealey Publications.

Cincinnati Insurance wants a declaration that it has no duty to defend or indemnify Source Data Systems and can recover defense costs already incurred, Mealey Publications said.


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-- Leska (, December 11, 1998.

Ooopsies, again, it wasn't supposed to happen, but the emergency back-ups failed too .... look for failures during this upcoming time of testing ....

Issue date: 10 December 1998
Article source: Computer Weekly News

Banks Hit By Two-day Network Date Failure

The installation of millennium-compliant software by a telecommunications supplier left dozens of London investment banks and brokers suffering from a network failure at the end of last month.

Their Colt-run telecommunications network failed when the software installation led to transmission on 25 out of 300 fibre optic rings failing, said a Colt spokesman.

Mercury Asset Management and Tokyo Mitsubishi International were among those affected by the almost two-day failure, with market data services provided by Reuters and Bloomberg also affected.

Users of the Colt network had previously been told such a failure was unlikely, as the supplier had said any breakdown to any part of the network would be over-ridden by emergency back-up procedures, but this time they did not work.

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-- Leska (, December 11, 1998.

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