Accounting 12 Chapter 14
Link: http://www.bclocalnews.com/surrey_area/surreyleader/news/39372469.html
Summary
This article is about a person trying to sell their recreational vehicle through an online ad. The person received an email, often the name of Nathan Seer or Rich Edmund, to say that they are a likely buyer. The buyer offers a flat cash payment by using a cheque from an earlier deal that never succeeded . However, the cheque is for a bigger amount than the RV's selling price so the buyer explains to the seller that he can send him a cheque for the difference. The seller in the end realized that he had receieved a NSF and lost as much as $10 000 not including the RV.
Connection
The connection between chapter fourteen and this article is not sufficient funds. The dishonoured cheque that the man receieved has made him lose thousands of dollars. Not only did he lose the RV and roughly around $10 000, he also has to be responsible for any counterfeit or NSF cheques, including fees, interest and repayment of the full amount. The article also mentions that the buyer should be advised that the cheque is certified (the bank takes the funds out of the issuer's account in advance) in order to confirm that the cheque is good.
Reflection
I think issuing a cheque is not only convenient but also risky. It seems like it is a gamble between whether the issuer is reliable or not. If the issuer is not, then the receiver would get a NSF and on top of that service charges to pay despite that they are the innocent party. It seems unfair for the innocent party to pay service charges when they are the ones that has lost a huge amount of money. I think it's best if the issuer gets charged of around 10% of what they issued in the bounce cheque in order to lower the possibility of scams.
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2 comments:
After reading this article, I am quite shocked at what people will do for money these days. It's horrible how an innocent person trying to sell an RV ends up facing a lost of $10,000 and losing the RV with no payments. On top of that, the person needs to pay off the not sufficient funds and additional fees. Like you mentioned in your blog, it is very unfair. Most people treat cheques like cash. However, with more and more scams and frauds occurring, people need to be extra careful when accepting cheques. More security needs to be implemented for the handling of cheques. I think certified cheques should be used for all transactions and not only for large sums of money. Although it requires going to the bank, getting a cheque certified adds security and gives a feeling of reassurance to the recipient of the cheque. Credit checks should also be done more often, in order to avoid situations like this one. The 10% charge that you mentioned also sounds quite proactive.
-M.Wong (Block B)
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