Y2K Glitch Is Causing Multiple Charges for Some Cardholders

A credit- and debit-card processing problem--stemming from a Y2K-related software glitch--is causing thousands of Visa and MasterCard customers around the world to be repeatedly charged for the same transaction.

The problem, which arose in transactions occurring after Jan. 1, has been traced to a software system used by more than 100,000 retailers and merchants globally.

It was unclear how many customers have been affected, but officials said they believed the foul-up was not widespread.

“We don’t think this is huge but we don’t have any numbers,” said Sharon Gamsin, a MasterCard spokeswoman.

Nevertheless, the glitch is the most significant Y2K problem faced thus far by the U.S. financial services industry, which largely escaped major disruptions because of the date rollover. The industry spent nearly $10 billion to upgrade its systems.

Officials at Virginia-based CyberCash, which developed the ICVerify software that is causing the problem, said the snafu appears to be occurring only at point-of-service terminals owned by merchants and retailers who failed to upgrade software systems before the end of 1999.

“A fair number of merchants had the good sense to download the upgrade before Jan. 1, but a fair number did not,” said Sydney Rubin, a spokeswoman for CyberCash.

She did not know how many merchants or customers have been affected.

One large card-processing customer reported that it has so far experienced problems with about 4,000 transactions out of nearly 100 million completed since Jan. 1, Rubin said.

Because the problem stems from the merchant software, and not the bank or credit card issuer, officials believe that American Express and Discover cardholders also may be vulnerable. Officials at the two credit card giants couldn’t be reached for comment late Thursday.

CyberCash is urging merchants who still are using old software systems to contact the company or download the software fix.

Banks and credit card issuers began noticing the problem this week, when computer monitoring systems picked up on a sudden increase in duplicate postings of the same transaction.

Officials at San Francisco-based Wells Fargo Bank said they have detected problems with about 70 of the 1,300 merchants that use the CyberCash system. The bank does not know how many of its customers have been affected, but it estimated that less than 1% have been overcharged.

Customers who have been affected will not be responsible for the charges or for any fees associated with the mistake, spokeswoman Kathleen Shilkret said.