Remembering the Y2K Panic

Disaster planning came to the forefront at the turn of the millennium

As ACA International's 1998/99 fiscal year began, the credit and collection industry faced many significant issues. The nation was experiencing a record economy, including the lowest unemployment rate in years. The Internet was becoming an increasingly large factor for ACA members' businesses. And, most dramatically, the year 2000 - Y2K, as it was known - was only 1 8 months away and talk of the "millennium bug" was on everyone's minds.

The Y2K panic hinged on the premise that when the clock struck midnight on Dec. 31, 1999, many computers would lose track of the date - unable to rollover from 1999 to 2000 because they been programmed to store years with only two digits; for example, 1990 was stored as 90.

While in hindsight the Y2K scare was not as devastating as everyone had feared, at the time there was a high level of anxiety and panic in the air. The media reported that the world could see large-scale computer outages, resulting in planes dropping from the sky and complete pandemonium on the streets. Some people were going to extremes by stacking up on food and supplies and preparing to live in a world where everything connected to a computer would shut down for an unknown period of time.

A 1999 Financial Executives Institute/Duke University Corporate Outlook Survey indicated that 3 7 percent of corporate executives expected the U.S. economy to experience some problems due to Y2K issues, and four out of five firms had dedicated 1 percent to 5 percent of their 1999 expenses to becoming Y2K compliant.

ACA International members were overloaded with warnings from the media regarding Y2K compliance and the security of the economy and their businesses. Therefore, 1998/99 ACA President Jon Dunn immediately began working with the ACA staff to implement a Y2K plan for ACA. Together they put a plan in place to ensure all systems at the ACA headquarters were in compliance and would continue to function once the clock struck midnight. The main purpose was to ensure there would not be an interruption in services provided to ACA members, such as insurance, Internet, long-distance telephone service and others.

ACA staff also worked to educate members on how to implement Y2K compliance plans in their offices to ensure the stability of their businesses and to assist them in reducing and preventing an interruption in serving their clients. Information was made available to members on ACA Online and in Collector magazine.

Dunn urged members to begin creating a Y2K compliance plan well in advance and to plan for the worst possible scenario. This meant not only upgrading computer systems, but also checking on the compliance of security systems, elevators, dialing equipment, phone systems, heating and cooling systems and more.

When asked his opinion on the Y2K issue in 1999, Dunn said, "I personally do not believe the end of time is near, but we are making sure that ACA is ready as we enter into the year 2000."

In the end, of course, Dunn's belief that the Y2K bug was overhyped was correct. On Jan. 1, 2000, credit and collection companies continued business as usual. But despite the false alarm, many companies had, for the first time, given disaster planning center stage, which may have ultimately helped them prevent losses from future catastrophes.

[Sidebar]

Time Capsule looks back at a different piece of ACAs history. This month's Time Capsule remembers ACA's preparation for the "millennium bug."

[Author Affiliation]

Anne Rosso is associate editor of Collector.