Source: BURSA | Published: April 2021
The global COVID-19 pandemic has changed the status quo for businesses and how they operate, with more emphasis being placed on establishing a digital presence. Many companies have been actively embarking on the challenging task of adopting an online platform to facilitate their business processes and lengthen their reach to clients. With new technological advancements sprouting daily, online crime is also on the rise. Many fall prey to online crimes due to longer hours spent on the Internet during COVID-19 lockdowns. During the first order of ‘movement control’ last year, the volume of online crime has significantly risen in Malaysia. This is due to the fact that the majority of daily activities have moved online such as ordering food, materials, and even grocery shopping. This is a defining feature of the world’s transition into a ‘new normal’.
The Different Types of Online Scams
Online sites and platforms have now become the primary source of targets for scammers looking to exploit unsuspecting individuals. There are many types of cybercrime, but the most common type is online scamming. Let us explore the different forms that online scamming can take.
1) Cold Calling
Illegal online scams are often carried out through “cold calling”. The listed tactics below all fall under the same umbrella of online scamming in the form of cold calling.
- Mysteriously winning money or items
- Winning the lottery
- Cash-back refund claims
- “Get-rich-quick” schemes
- Internet investment schemes
- Foreign Exchange schemes
- Banks enquiring about transactions/sensitive account information
Vulnerable individuals are not aware of these scams that are aimed at getting their sensitive information. Trouble ensues once these individuals fail to differentiate legitimate organisations from scammers. One of the most common mistakes made by these victims is subconsciously reacting to the situation by trying to take matters into their own hands without using official channels of assistance rendered by the relevant authorities.
2) Love Scam
With our lifestyle more intertwined with the Internet, the Internet has become the primary platform for scammers to look for unsuspecting individuals. It has also become common for us to see news on victims scammed under the pretence of love, security, and wealth from knowing someone from social media or responding to an advertisement. One of the most common scams is a love scam which typically comes with promise of love and friendship. Once trust has been established, a victim will be asked to make monetary transfers as a form of support to the scammer’s endeavours.
3) Security Scam
Another type of scam is security scam which is often accompanied by impersonation of authorities in a phishing email. This type of scam stoke fear in victims and the victims will be made to make a monetary transfer in order to preserve their wealth.
4) Gift Scam
The last common type of scam is gift scam, where victims are told they have won a gift and they only need to provide a few sensitive details to receive the gift. For example, you often see advertisements telling you that you have been selected as one lucky winner by an e-commerce platform you frequent. All you must do is to provide a few key details and pay for postage fee to receive your gift. These advertisements often look legitimate and need a keen eye to discern its authenticity.
The Increase of Scam Cases in Malaysia
While Internet scams are becoming increasingly common, the conventional methods of scams are still very much prevalent. The Ombudsman for Financial Services (OFS), formerly known as the Financial Mediation Bureau was approved by Bank Negara Malaysia (BNM) pursuant to the Financial Services Act 2013 and the Islamic Financial Services Act 2013. They are a non-profit organisation and function as an alternative dispute resolution channel to resolve disputes between financial service providers (FSPs), licensed or approved by BNM and financial consumers. In their recent report, there has been an increase in number of financial scams recorded, particularly during the Recovery Movement Control Order (RMCO) period in Malaysia last year. These scams vary from telephone scams, phishing, SMS scams and most of them involve financial transactions for the purpose of personal gain.
Reference: Cover Story: Consumers more vulnerable to scams during pandemic; link: https://www.theedgemarkets.com/article/cover-story-consumers-more-vulnerable-scams-during-pandemic.
As shown above, the number of scam cases received by OFS has increased significantly last year as compared to its preceding year. This figure may be higher now with the newly extended RMCO. On top of this, it must also be taken into consideration that some victims will not report their cases as they lack information or knowledge on how to do so. With this information, comes a critical question; can we prevent such scams from occurring? The answer is, yes!
Raising Awareness of the Dangers of Scams
Many steps have been taken by the authorities to educate and remind consumers about scams and fraud cases that have been circulating during the pandemic. Although participating financial institutions have played their part by raising awareness of these scams, it is also best that businesses continuously remind and inform consumers about the latest trends of scams.
As consumers, we have to be cautious when receiving calls from unknown sources. We should adopt the habit of checking the background of unknown individuals and parties before disclosing information or approving transactions. Having the vigilance to be able to identify an offer or proposal that is too good to be true is instrumental in the battle against scammers. Furthermore, reacting out of impulsiveness can often prove to be advantageous for scammers. It is best not to react instantly but to think critically and to take note of the details of the scammer. Consumers should try their best to not engage in calls or messages from unknown individuals claiming to be authoritative figures. Scammers do their level best to threaten unsuspecting individuals with the prospect of criminal charges, offences, or arrears. Remain calm and do not get intimidated by these empty threats.
Scammers are also known to ask for basic personal info and banking details such as Transaction Authorisation Codes (TACs), card numbers, card PINs, security, and account details. These are tactics that we can overlook and be unaware of. With this in mind, consumers should never reveal personal passwords or TACs to others. Double-checking that the transaction details are correct is absolutely critical in the fight against scammers. We should regularly conduct thorough checks before authorising transactions to ensure legitimacy. The step of authorisation is the main cog that will allow the transaction to proceed. If a consumer finds abnormalities, it should be reported immediately.
Relevant Authorities for Assistance
Consumers have every prerogative to report these scam incidences to the authorities to kickstart preventative action to be taken to curb such occurrences from happening. Here in Malaysia, consumers should be aware of these entities that will be able to guide them in the event where a fraudulent transaction is suspected:
- Royal Malaysia Police (PDRM)
- Bank Negara Malaysia (BNM)
- Securities Commission Malaysia (SC)
- Ministry of Domestic Trade, Co-Operatives and Consumerism (KPDNKK)
- Ministry of Communications and Multimedia Malaysia (KKMM)
- Companies Commission of Malaysia (SSM)
- Malaysian Communications & Multimedia Commission (MCMC)
Always Remain Vigilant
Scammers are using the COVID-19 situation to their advantage, preying on vulnerable targets, especially those who have recently lost their job, those suffering from financial loss and failing business practices. Ultimately, it is our responsibility as consumers to be vigilant of our surroundings, and not to react immediately in a rash banner. It is of utmost importance to remind our family, friends and colleagues and to share our experiences in order to avoid the looming threat of getting scammed.
Tags: SCAMS
