Consumer Worries Could Be Worse Than Y2K Bug.

BANKS and government officials have taken great pains to assure the public that the nation's financial institutions will be 100 percent ready to meet Y2K.

But some consumers still aren't buying it.

"It is likely that the fear about Y2K will be causing more problems than the Y2K bug," said sociologist Alan Glassner, author of "The Culture of Fear." "You could see people withdrawing their money from banks or selling their stocks in a panic."

The reasons for consumer fears are complex and genuine. They cut across cultural and religious grounds and reflect a growing credibility gap between public officials and the public. After all, if people can't believe President Clinton when he assures them he didn't have a sexual dalliance with Monica Lewinsky, can they believe FDIC officials when they say that the banks are entirely safe?

Moreover, many consumers don't trust technology as an infallible defense against disaster. The evidence is everywhere -- most recently when the Mars Polar Lander was lost in space.

Some blame the media for raising concerns about banking problems, though most major news organizations have been especially circumspect in detailing the safeguards being taken. Still, there are the occasional reports of people stockpiling food and fuel -- and that can take on a life of their own.

"Much of the hysteria or great public concern is generated by the process of putting stories into the news media," said Richard H. Day, a professor of economics at USC.

Then there are the millennium cultists, doomsday devotees, conspiracy theorists and believers in the Apocalypse, all of whom have been raising their concerns about bank safety for years. The Internet has allowed some paranoid users to spread their concerns about a banking catastrophe faster than a speeding bullet.

"The effects of this fear will be felt most by people with limited education," said Frank Acosta, associate professor of psychiatry and behavioral sciences at USC School of Medicine. "They are the types who would experience this media hysteria more than those people who are more sophisticated."

Although Acosta has not yet treated anyone with a panic attack, patients have expressed some concern about Y2K. "As the days get closer, it may increase," he said.

Indeed, certain depositors who are susceptible to such fears could become more vulnerable to rumors and reports about bank safety.

In a Gallup poll taken in October, 39 percent said they would probably or definitely withdraw extra cash in the days before New Year's -- though that was down substantially from March, when 62 percent said they would make cash withdrawals.

"People who tend to panic easily and who have irrational fears and who blow things out of proportion will be affected by this," said Helen Land, associate professor of social work at USC. "They aren't able to problem solve; they fear the fear itself and not the outcome."

There are antidotes for Y2K banking fears, Land said. They include professional advice, antidepressants and anti-anxiety drugs that diminish compulsive behavior.

Other help can come from family support groups, friends and staying off the Internet, which, she said, can be just as addictive as "drinking or taking drugs or sex. People get addicted to computers."

Not surprisingly, criminals have begun taking advantage of Y2K banking fears. One scam finds a con man, posing as a bank representative, making telephone calls to customers telling them that the bank is having trouble getting its computer system ready for the Year 2000. Customers are asked to transfer money into special accounts until the systems become Y2K ready.

Another scam has a con artist telephoning credit-card customers and asking for verification of card numbers so they can be protected during a period of computer upgrades.