Chapter 4 Blog- Vehicle warranty scam picks up speed

http://autos.canada.com/news/story.html?id=17fbd1fe-af08-4e73-8c74-f22d8e40ee69

Summary

My blog is about a recent vehicle warranty scam that is rapidly picking up momentum in Canada. A number of Canadian citizens are receiving phone calls from a U.S. firm representing itself as “Warranty Center” which is offering vehicle warranty. An automated message has been dialling up cell phone numbers and land lines, telling people that their warranty will expire in two days and they have to make an immediate credit card payment over the phone. The scam claims that the customer’s vehicle information was provided by the vehicle manufacturer, so the customer believes that the information provided by the scam is official.

Connections

I connected this article to the warranty service part of the chapter. Almost all automotive companies such as Ford, GM, and Honda offer warranty services to their customers to gain revenue. However, with this recent warranty scam customers are going to be hesitant to buy vehicle warranty. With the downturn in the economy as of late, automotive companies cannot afford their customers to pass on buying vehicle warranty from them. At the end of the accounting cycle, automotive companies are going to see less revenue coming in due to this scam. With big automotive companies like GM and Chrysler already going bankrupt in the States, what can we expect to happen to the automotive companies in Canada with all these scams surfacing and hurting our economy?

Personal Reflection

I think that this warranty scam occurred at the worst time possible. Automotive companies currently are seeing a decrease in revenue from previous years, and this certainly does not help to increase revenue. If things do not get better for automotive companies, it seems that Canada’s automotive companies may end up like the States. I think that the government may need to bailout some major automotive companies in the future with all these troubles surfacing for them. Automotive companies may begin to cut employees, reduce salaries, and even decrease research to continue operating. I think that the government needs to crack down on these scams because they are affecting our economy as well as our citizens.

Harman Basra

Financial Accounting

Block B