January 6, 2010

30M German Bankcards Hit With 2010 New-Year Bug

Some 30 million German bankcards are believed to be infected with a "Y2K"-like computer bug that has rendered the cards unable to process the number 2010, warned industry groups and bank associations on Tuesday.

The problem affected cardholders attempting to use cash machines or make payments throughout Germany and abroad.

A global "Y2K" alert took place a decade ago, when computer experts feared that hardware and software systems would fail as the clocks rolled over to the year 2000.  The experts believed a problem could be triggered when computers and other devices, which used just two digits to denote the year, mistook the year 2000 for the year 1900.  However, the so-called "millennium bug" ultimately caused few problems.

Ironically, the latest issue seems to involve more recently-issued cards, which contain a computer chip designed to provide extra security, while older cards with magnetic strips on the back seem to be unaffected.
The problem could take up to a week to resolve, according to a statement by the DSGV group, which represents public-sector banks.

ATM machines were adjusted hours after the issue came to light to ensure that customers could withdraw cash, the group said.  While there may still be problems with some terminals, these should be repaired by Monday, DSGV said.  Problems remain with credit cards, and the group advised customers to use their debit cards for now.

The bug, which it dubbed a delayed "Year 2000 problem", should be eliminated "by next Monday", and "withdrawal restrictions" on some credit cards are possible until then, the statement read.

"The use of EC cards and not credit cards is recommended at cash machines until further notice," the group said, adding that it was "working intensively" to address the problem.

The group said the problem involved some 20 million "electronic cash" (EC) cards, or "girocards," and 3.5 million credit cards issued by the savings and regional banks it represents --nearly half of the total number of cards issued by those banks.

EC cards are direct debit instruments, which do not allow customers to purchase on credit.  About 93 million EC cards are currently in circulation in Germany, where cash is also a widely used form of payment.

Although 25,700 of DSGV's machines have been repaired, 30 percent of all payment terminals in the country were reportedly still affected on Tuesday, the group said.

German stores are equipped with around 600,000 such payment terminals.

The BVR group of cooperative banks said the faulty software had affected about 4 million of the debit cards issued by its member banks, or roughly 15 percent of the total.

There were no problems withdrawing cash, and its credit cards were unaffected, they said.

The private bank association BDB said some 2.5 million of its cards had been affected.

A spokeswoman with the privately-held Commerzbank said some of its cards had been affected but that many of its terminals had already been configured to accept the questionable cards. 

Postbank, Germany's largest bank and the owner of the country's biggest retail banking network, did not disclose whether its cards had been impacted, the AFP reported.

A Deutsche Bank spokeswoman said its customers were unaffected.

"Deutsche Bank clients do not have a problem," she told AFP.

Germans on holiday travel outside the country also reported payment problems.