First Y2K Fraud Casegreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
By David McGuire, Newsbytes July 30, 1999
A company that allegedly sold consumers a fraudulent "Y2K protection package" for their credit cards has reached $100,000 settlement with the Federal Trade Commission (FTC). The action was the first Y2K- related fraud case brought by the FTC.
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 FTCs 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 (firstname.lastname@example.org), July 30, 1999
Y2K IS the biggest fraud case in the history of the world. I can't imagine anything that has compared.
-- Will continue (email@example.com), July 30, 1999.