Number of victims rises to 380 in Sierra Madre gas station fraud

http://latimesblogs.latimes.com/lanow/2011/01/number-of-victims-rises-to-380-in-sierra-madre-gas-station-fraud.html


Summary:

This article discusses one of the most common issues faced by almost every province and states over the world of Debit and Credit Card scams. In Sierra Madre, California, Police have identified 380 victims of credit or debit card fraud at a Sierra Madre gas station with losses exceeding $109,000. Most scam victims were found at EVG Quality Gas, which suddenly shut down after Christmas. Within days, hundreds of people found their credit or debit cards had been used without their authorization. It is presumed that the owner of the station, Evgeny K. Yakimenko is heavily involved in these scams. The credit and debit cards were skimmed using an electronic device that snags account information. In some cases, the victim's card information was used to charge purchases; in other instances, cloned cards were created to make retail purchases elsewhere or to withdraw money from bank accounts. Investigators are seeking to question station owner Evgeny K. Yakimenko, but he has not been seen since the station closed.

Connection:
The connection between the article and the information in the text in Chapter 14 is Bank Credit Cards.  In the text, it is mentioned that cash is one of the most risky along with inefficient source of exchange in business as it takes very high security to guard large amounts of cash and is very time consuming to account for all the cash taken in at the end of the day. Therefore, credit cards provide both merchants and consumers with the advantage of efficiency and convenience while doing business. More importantly, this article highlights the fact that all accounting entries are kept up to date on a regular basis . Even though this article discusses an issue on credit card scams, the accounting entry of the sales are  still recorded in the same manner. Since the owner of the EVG gas station was tracing his customers' credit card numbers and pins, it resulted in an overstatement in the consumers' credit balances. When consumers began noticing that they haven't made various purchases by analyzing their bank statements, the frauds were exposed. That's why to keep accounting data up to date is very essential.

Reflection:
Credit Cards play a very integral part in our modern day society,where more than cash and cheques, people depend on their credit cards to do business. However, after coming forth with such incidents of credit card scams and frauds, how are people suppose to have trust in their credit cards? For consumers, this can be very disheartening. Even though customers get credited back the amount, ultimately it is coming out of their pockets. The scams are not covered by the store owners, neither by the banks. The persistent increase of interest rates and credit card fees strain out the money out of consumers and in the long run, customers are the one covering for their own loss. As people become more cautious and alarmed about these daily scams however, they will begin to put a grasp on their spending, and are going to hesitate before using their credit cards. If the credit card securities are not re-considered and improved, this could result in major declines in sales and production for some large companies.

US dollar to hit 95c in a year:UBS

http://business.financialpost.com/2010/10/20/u-s-dollar-to-hit-95%c2%a2-canadian-in-a-year-ubs/

The article that I read was written by John Shmuel commenting on the continuing weakness of the U.S currency. For years, U.S dollar has been the highlight of the world's economy holding up its country's financial status to the peak. However, as the years have been racing forward, U.S economy has been experiencing a significant downfall in their currency which is also one of the main reasons of U.S facing the Great Recession. Just last month UBS Wealth Management Research put out a report forecasting the U.S. dollar’s continued weakness against currencies like the euro and the British pound. The main concern is that the euro could replace the dollar as an international currency.  The new forecast anticipates that the U.S. and Canadian dollars will reach parity within the next three months, while the euro is likely to be worth US$1.41 during that time period. Such drastic downfall in the U.S currency could result in the country being wedged in the Great Recession for a longer period of time.
Connection:
The connection between this article and the information in the text is Cost of Goods Sold and Gross Profit. Even though the article didn't mention anything about merchandising business, it has a direct affect on Canadian businesses. In terms of purchasing goods, Canadian businesses will now be paying lower price on cost of goods sold, which will  result in a higher Gross Profit for their business.
Reflection:
This article reinforces the idea that for an accountant, it's essential to stay up-to-date with the global economy because for a country such as Canada that has strong international ties with other countries- in particular the U.S- any changes and variations in another country's financial state directly affects our country's economy as well.
Personally, I am quite delighted by this article because as a consumer myself, I want to be able to shop at an economical price for the items I love, so now when i go down to the U.S ( which I do very frequently), I'll be able to buy MORE and pay LESS!