Question: Since January 1st came with so little incident, some people questioned whether Y2K had really been a problem at all. That argument seems to have been negated -- some things did go wrong. Tell me about those.

Answer: Things did go wrong. And, I think there's now enough information out, internationally and nationally, about things that went wrong that people understand there was a real risk.

The things that went wrong turned out not to be big problems because there were so few of them. My favorite example is the credit card processing problem that showed up in the first week of January. Thousands of merchants were offered a free upgrade to make sure that their programs for processing credit cards were Y2K compliant. Some of them paid no attention and did not adopt the upgrade. So, if you bought something from any of those merchants on January 1st, you were re-billed for it every day.

Fortunately, credit companies and banks have programs to catch duplicate billings, and by Thursday, January 6, they were beginning to catch a fairly significant volume. But, they were satisfied that they could solve the problem. The reason that the problem got solved in 24 hours, and the reason that almost no one ever got a double billing on their credit card, was because it was the only significant Y2K problem the credit card companies and banks had to fix. You can imagine how much "fun" this would have been if it had been just one of 12 or 15 Y2k failures. We would have had to triage and say that some of the problems would have to wait because we didn't have enough people to deal with all of them at once.





There were a few experts who said, "Well, the money must have been wasted." I told the media that I didn't know anybody who was working in, or managing, a large bank, financial institution, power company, or telephone company who thought they had wasted the money, and those guys are pretty smart, and nobody sells them a bill of goods.

To the extent that they may have been overly cautious in protecting their systems, that's what you would do if you were running a critical operation. If a bank had had a major problem, the acceptable answer would not have been, "Yeah, but we saved 10 percent on the repair costs." Perhaps, with hindsight and knowing which failures actually occurred, people might have been able to save a little money around the edges. But, none of the major companies who did the work and spent the money have expressed real regret.

Question: So, people did do tests to verify that they had a problem?

Answer: There were problems, yes. In fact, as time went on, the tools for detecting a problem got better and better. So, throughout 1999, Federal agencies and other large organizations used those tools to double-check the work. And, as they used those tools, they found more problems that had been missed.

Some banks ended up spending twice as much as they initially thought they would. Now, they didn't do that for public relations purposes. They did that because they found more and more mistakes and complexity in the system than they originally anticipated. So, there are numerous indications that people found and fixed major problems.

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