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May 18, 1999
Web posted at: 2:02 p.m. EDT (1802 GMT)

by Tom Spring

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(IDG) -- The Y2K bug is starting to bite a little deeper and sting a little harder. Millennium bug scams are popping up around the globe, preying on the paranoid. The gimmicks range from bogus Y2K insurance, credit card and bank account fraud, and overpriced survival kits to computer-sellers tricking the naïve into replacing their PCs by claiming that noncompliant systems might explode.

Credit Con

The most popular scam seems to be a ploy to get you to divulge your credit card number. One widely reported version involves a caller posing as a service representative from the recipient's credit card company. The caller claims the credit card company is sending out replacement strips to stick over the magnetic strip on the backs of credit cards to ward off Y2K problems. Customers who don't get one won't be able to use their cards come January 1, 2000, the caller warns. Cardholders are then asked for their account numbers for "verification."

Bogus Bonds

Some con artists try to persuade people to withdraw their money from banks to avoid computer glitches, and then "invest" it with them, the North American Securities Administrators Association says.

Frost National Bank in San Antonio, Texas, confirmed that customers have complained of scammers who urge them to transfer the contents of their bank accounts into a "Y2K safe" bond fund especially designed to protect money until the bank can fully comply with Y2K requirements.

"We have heard from many other banks who have received similar complaints," says Louis Barton, Y2K program director for Frost National Bank. Such Y2K-safe bond funds do not exist, NASAA says.

Illegitimate Insurance

Telemarketing watchdog Phonebusters, based in North Bay, Ontario, Canada, reports rogue telemarketers are trying to obtain credit card account numbers by offering insurance against false billings or lost account information as a result of the date transition.

"We've had numerous reports regarding people calling and being asked to pay fees to ensure the safety of their money," says a representative.

System Scams and Survivalists

Newsbytes News Network reports from the Philippines that fly-by-night system vendors have conned computer owners into unnecessarily replacing PCs, citing Y2K noncompliance. Con artists have gone so far as to warn that systems risk exploding come January 1, 2000, if they aren't replaced. Newsbytes reports that the Philippine government's Y2K Commission has issued public warnings concerning this scam.

The Better Business Bureau has identified more than 100,000 Web sites selling year 2000 survival products. Claiming to help you cope, many are peddling survival kits of ordinary household items sold at nearly ten times their value.

Gullibility Gag

A recent Australian hoax illustrates the potential harm a scam could incur. As an April Fools joke to test the gullibility of the public, the Australian National Securities and Investment Commission set up a phony Millennium Bug Insurance Company online. Offering blue chip companies insurance against losses caused by the Y2K bug, the site solicited investments in the company from Internet visitors.

More than 10,000 people visited the Web site, including 233 who offered to invest a total of $4 million in the company. On April 1, investors were told the Web site was part of an elaborate scam to teach investors to be more careful.

The U.S. Federal Trade Commission has created a toll-free hotline for consumers to call with questions about year 2000 scams. The number is 888/872-4925.