"Y2K? Y 2 CARE" Series Offers Tips for Consumers and Industry about How To Prepare for the Year 2000

"Y2K? Y 2 Care" is the theme of five business and consumer publications released today by the Federal Trade Commission as part of National Y2K Action Week, October 19-23. The week is an initiative of the President's Council on Year 2000 Conversion and is intended to motivate small and medium-sized businesses to address the Year 2000 computer problem. One popular name for the Year 2000 problem or the Y2K computer glitch -- the "millennium bug" -- refers to the possibility that some computers and computerized systems will fail to correctly recognize dates after 1999.

"The countdown to the Year 2000 has begun in earnest," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "And this week is an ideal time to focus on how an effective public/private partnership can help take the sting out of the 'millennium bug' and minimize any negative impact on consumers."

As a member of the President's Council on Year 2000 Conversion, the FTC began a special business and consumer outreach effort in May 1998 that included seeking public comment on the impact of Y2K issues on financial services and consumer products. Based on the comments it received, FTC representatives have been meeting regularly with industry and consumer groups to learn more about the possible problems consumers and manufacturers may encounter, and to develop ways to ensure that consumers are informed about any remedies that may be available to fix them.

Financial Services: Running the Numbers and Protecting Your Bottomline

Many consumer financial services providers, such as banks, mortgage companies, investment firms, and credit card issuers rely on computer systems to perform a variety of date-sensitive functions, including calculating interest and other charges; tracking deposit, loan, and lease payments; transferring funds electronically; and producing billing or other periodic statements.

Two of the items released today address financial services and how consumers and industry can reduce any negative impact of Y2K issues on their bottomlines. Among the suggestions in the Consumer Alert, "Y2K? Y 2 Care: Preparing Your Personal Finances for the Year 2000," are:

• Ask your financial service provider about its plans to deal with Y2K. If you're not comfortable with the response, consider doing business elsewhere.

• Ask your provider what type of backup records are kept in case of an emergency. How would these records be used to identify and correct problems affecting your deposit, loan, or other account?

• Keep canceled checks as proof of payment for at least several months before and after the date change. If you bank by computer, download your transaction records and store them on a backup disk. You also may want to print out downloaded records in case backup disks are contaminated with Y2K problems.

The FTC Business Alert, "Y2K? Y 2 Care: 7 Steps to A Successful Transition For Consumer Financial Service Providers," highlights some general guidelines for industry. The brochure suggests:

• One: Take Inventory -- Make a list of office equipment, computer systems, software programs, fax machines, and other pieces of equipment that use embedded chips with a month/date/year calendar function. Also consider support systems, such as elevators, heating and cooling systems, security systems and access to parking garages.

• Two: Assess and Prioritize -- List what you've done to prepare for Y2K. Identify equipment and systems critical to your business operation. Make it a priority to fix or replace them, if appropriate.

• Three: Test Your Systems -- Test your computer systems for Y2K problems.

• Four: Correct Problems -- Check out computer software or equipment upgrades to fix your Y2K problems. Verify how and whether your vendors are preparing for the Y2K transition; get their timetable.

• Five: Make Contingency Plans -- Expect the unexpected. Develop contingency plans, including a plan if your vendors have problems making the transition. Keep paper records of your files and back up disks or tapes.

• Six: Be Alert to Recontamination -- Once you've tested your computer systems and fixed any Y2K problems, be careful not to recontaminate your systems by installing new, untested programs. Make sure your employees are not installing any untested software programs.

• Seven: Talk to Your Customers -- Keep your business partners and employees informed. Communicate your Y2K status to customers through billing statements, the Internet, toll-free telephone, or a fax-back system.

Consumer Products: Will the Clock Keep on Ticking?

A few weeks ago, the FTC conducted an informal surf of the websites maintained by the manufacturers of many consumer products and found that there was more that companies could do to educate consumers about potential Year 2000 problems. While home-office equipment manufacturers are doing a fairly good job of providing product-specific Y2K information, the survey showed that the producers of consumer electronics and home appliances containing microchips are not yet systematically providing such information.

On September 28, the agency released a Business Alert, entitled "Y2K? Y 2 Care: Communicating Product Compliance to Your Customers," which suggests:

• Companies use their websites to disclose the Y2K compliance status of their products by including a complete list by model numbers and year.

• Companies define "Y2K compliant" and include a description of any anticipated Y2K problems.

• Companies tell consumers whether there are remedies available to fix products with Y2K problems.

• Companies also offer Y2K information to consumers via a toll-free telephone number or fax-back system.

As a follow up to this Business Alert, the FTC today released two Consumer Alerts about Consumer Products. The alert, titled "Y2K Y 2 Care: Information-Technology and Home-Office Products," explains that personal computers may have Y2K problems because the microchips are programmed to use a month, date, and year calendar function. While home-office products such as scanners, copiers and printers may contain embedded chips, they generally don't have calendar functions and should not have Y2K problems. According to manufacturers, most current models of fax machines, which do have calendar functions, won't have Y2K problems; however, older models may use the wrong dates. The alert suggests:

• If you're not sure whether your product has a calendar function, or if you simply want more information about Y2K and your "information technology" and home-office products, contact the manufacturer. Many have toll-free telephone numbers and Web sites to answer your Y2K questions.

• If you've added transaction-logging components with date-stamping capabilities to such equipment, check with the equipment's manufacturer to learn whether the added component will cause Y2K problems.

The second Consumer Alert, "Y2K? Y 2 Care: Consumer Electronic Products," notes that a variety of consumer products use microchips, including some small and large appliances, heating and cooling equipment, home entertainment audio/video products, photographic equipment, wristwatches, calculators, pocket electronic organizers, thermostats and security systems. Programmable microwave ovens and coffeemakers, for example, are not likely to have Y2K problems because they have clock and not calendar functions. Other products, such as refrigerators and heating and cooling equipment, may have chips that keep track of cycles rather than dates; therefore, they too are unlikely to have Y2K problems. The alert recommends that consumers check with the manufacturers of many of these products to learn whether they will continue to work after January 1, 2000.

NOTE: For more information on National Y2K Action Week, please visit www.y2k.gov  or call 1-800-U-ASK-SBA.

Copies of the full text of the entire series of "Y2K? Y 2 Care" consumer and business publications are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(FTC File No. P984238)