Commonly reffered to as 'The 3 bars', three horizontal lines appear in the gear display.
This indicates a shifting system fault, or a gearbox malfunction.

It can be caused by anything from a sticking gear, to a sensor spike.
The first and most obvious thing for you to try is switching off the ignition/disconnecting battery and try restarting.
If this fails you may want to look at the following possible resolutions.

Put the car in what would normally be 'reverse', and leave the handbrake off.

Pushing on either the front 'A' pillar or 'B' rear pillar, rock the car backwards and forwards.

You may hear it finally drop into gear, or the car will suddenly start beeping as the gear selects gear '0'.
When you next press the brake, or move the lever, it should now function correctly.

The second option to look at is the gear position sensor.
You can remove the wheel for more access.

Firstly, check the cables are not chaffing or worn.
If they're okay, then you can remove the gear selector using an E10 socket.
A replacement part is going to cost around £60 from smart.

The other option for you to try is to remove the gear selector motor.
Put the car into what should be 'neutral'.
Sometimes the gearbox can 'stick' in gear, jamming the motor.

The 2 securing motor bolts can be removed using an E10 socket.

This motor will rarely fail in it's job, so you should be able to remove the motor and hear the gears 'spring' back to neutral.
You can now refit the motor.

Should the problem come back, or be worse in wet weather, it is worth checking the wiring loom that passes between the plastic intercooler scoop and the gear selector motor. The wiring is quite often not run in the correct way and consequently gets 'sawn' through by the intercooler. The following image shows what can happen (click to enlarge):

Should this happen, you need to repair / replace the wiring loom between the gearbox and the ECU. When this happened to one of our cars, we found it easier to unplug the loom from all the gearbox connectors and pull it back through above the engine. After exposing the cores around the affected area, it was clear to see the cause of the problem.

The green wire has been badly cut by the intercooler duct. The tip of the arrow in the following picture shows where. The corrosion of the copper core of the wire is consistent with water getting into the damage and shorting the wire to the chassis earth. This particular wire handles the feedback information from the gear selector motor and the ECU. By shorting this wire to the chassis, the ECU would have received wrong information resulting in the 3 bars.

Should this problem occur on your fortwo, we recommend making the repair very robust and routing the wiring correctly through the intercooler duct. We also added some plastic sleeving to enhance the protection to the wiring.