A Fiber Optic Cable Was Cut
It was a short trip through Northern California. During the three days my cell phone did not work and twice in two different cities the restaurant took our credit card and used a pencil rubbed on a piece of paper over the credit card to take an image of the card. As I was on vacation I thought nothing of this.
By chance at a small local hangout in Florence, CA, we were seated with two women. One worked for a restaurant and one worked for a large national bank. Their topic of conversation was the severe difficulty they were under-going since a logging operation had cut a fiber optic cable serving the northern CA coastal region.
The woman working at the restaurant shared with me that their point of sale system was able to store credit numbers and transactions just incase there was a disruption in service, but this disruption in service had gone on so long that the buffer of 300 transactions has been reached the day before and they too were reduced to take credit card images on paper with a pencil rubber.
The banker’s story was even more worrying. While the bank gladly accepted deposits, they would not honor any withdrawals as their computer systems could not connect with the central computer system. This prohibition or choice to not allow withdrawals had started a severe problem. People and businesses could not buy the supplies that they needed. What began within hours was an informal credit system. The Feed and Tack business would recognize loyal customers and grant them credit that was to be paid when the cable was fixed. The same was true with the restaurants and the gas station that the locals visited. If you were not a local, it was cash and carry and I discovered when I had to fill up my van. If I wanted $100 of gas, I needed $100 of cash. Thankfully I am always prepared for these kinds of things.
Now – this is where I got a shock.
Where the heck was the bank’s disaster recovery plan? Where was the banks business continuity plan? Why is the whole community so dependable to one single communications pipeline?
I am a person who carries cash as I regularly notice that my cards do not work because the bank thinks a charge may be fraudulent, a European merchant and only use the chip and pin cards, or I can get a better price for cash (as I often can).
Now, the crowning glory, after service was restored the bank had to file many CTR reports as so many transactions had revered to cash over the three days that many who ran credit operations such as gas stations and restaurants and hotels were now marching over to the banks and depositing large volumes of cash.
This is a severe indictment of the area banks and the ability of a given branch to thrive after such an event. I think if a big earthquake hits and power and communications are that disrupted – the local economy would collapse in days. It was darn near that in the 3 days the fiber optic cable was cut.