Consumers Cautioned About Y2K Scamsgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
By David McGuire, Newsbytes July 30, 1999
In the wake of the Federal Trade Commission's (FTC) first Y2K-related fraud case, President's Council on Year 2000 Conversion Chair John Koskinen is warning consumers about other potential Y2K scams.
"There are always charlatans willing to take advantage of any situation," Koskinen told Newsbytes today. "It is important for (members of) the public not to get bamboozled by a fraud campaign."
A company that allegedly sold consumers a fraudulent "Y2K protection package" for their credit cards has reached $100,000 settlement with the FTC, Newsbytes reported Wednesday. The action was the first Y2K- related fraud case brought by the FTC.
It probably won't be the last, according to the FTC. "Opportunistic schemes do start to snowball as you get close to an event," Assistant Director of the FTC's Enforcement Division Heather Hippsley told Newsbytes.
Although consumers should always be leery about disseminating personal and financial information to unknown companies or individuals, they should be particularly cautious as Jan. 1 approaches, Hippsley and Koskinen agreed.
Canadian firm NCCP Ltd., operating under the name National Credit Card Protection Ltd., played on consumers' Y2K-related fears by offering an unnecessary and useless Y2K protection package, according to the FTC.
Consumers that purchased the protection package received adhesive stickers that NCCP purported would prevent Y2K-related credit card failures, according to the FTC.
"These con artists were making money selling imaginary fixes to imaginary problems," Jodie Bernstein, director of the FTC's Bureau of Consumer Protection said in a statement. "They were playing on consumers' fears about the Year 2000 computer bug and its potential impact on financial services," Bernstein said.
In its sales calls, NCCP is also alleged to have misled consumers about the extent of their exposure to credit card loss, theft or failure. Consumer liability stemming from lost or stolen credit cards is limited to $50 per card.
In addition to requiring NCCP to pay a $100,000 fine, the FTC settlement bans the company from selling any form of credit card registration or protection program and prevents the firm from making misrepresentations about Y2K or its relationships to credit card companies.
In order to protect people from Y2K fraud, the FTC, in conjunction with the Federal Financial Institutions Examination Council and the Presidents Council on Year 2000 Conversion, has issued a consumer alert titled "Y2K Y 2 Care: Protecting Your Finances from Year 2000 Scam Artists."
Further information is available on the FTC's Website, located at http://www.ftc.gov .
Newsbytes notes that banks and credit card companies are among the organizations best prepared to face the date roll-over. Recent reports have shown that credit card companies have nearly completed their Y2K remediation efforts.
-- Mild Mannered Reporter (email@example.com), July 30, 1999
Please read the last sentence in this report and note: They have been "nearly" complete for the past year. They are now out of valuable testing time, and still not finished in *AUGUST 1999*.
Yes indeed, lord knows American consumers are in dire need of being cautioned, about the potential scenerios that Y2K will inflict, as well as some of the scams the public is too stupid to avoid on their own. We need instructions suggesting the wrapper be removed from something before using it. Duhhhhhhh
-- Will continue (firstname.lastname@example.org), July 30, 1999.