Banks may pay the price for scams if negligent

">Hefty sum: Anwar said RM1.224bil in losses to online scams were recorded between January and October this year.

New law mulled to enforce liability for scams if negligent

PETALING JAYA: Banks may soon be held responsible for losses suffered by online scam victims if the losses are due to the banks’ negligence or disregard of regulations.

This may be among the provisions under the proposed Online Safety Bill that aims to combat online bullying, fraud and other cybercrimes.

“The law is likely to be tabled during the Parliament session next year,” Datuk Seri Anwar Ibrahim said during the Prime Minister’s Question Time in the Dewan Rakyat yesterday.

The Prime Minister said laws have to be tightened to better protect people against the growing threat of online scams that have cost Malaysians billions of ringgit.

“There are victims who are oblivious (that they are being scammed). That is why we need to tighten the laws,” he told Datuk Seri Doris Sophia Brodi (GPS-Sri Aman).

Doris had wanted to know if there are plans to enact specific laws such as Singapore’s Scam Bill to better protect Malaysians against online scammers.

Anwar said he agreed in principle to a suggestion by Nurul Amin Hamid (PN-Padang Terap) on making banks responsible for losses suffered by the victims.

Nurul Amin said such a move was implemented recently in the United Kingdom where victims were reimbursed within five working days.

Anwar said the regulation in the United Kingdom only came into play if the banks were found to be negligent or had failed to monitor the accounts according to regulations.The Prime Minister also commended the ongoing joint efforts by the National Scam Response Centre (NSRC) with relevant enforcement agencies in thwarting online scams.

“A total of RM19mil would have vanished if the scams had not been successfully blocked,” he said.

Since its formation in October 2022, the NSRC has seized RM6mil and recorded 140,474 complaints involving 69,000 scams.

The centre, under the Prime Minister’s Department, works with the police, Malaysian Communications and Multimedia Commission (MCMC), Bank Negara Malaysia, the National Anti-Financial Crime Centre as well as financial institutions and the telecommunications industry to tackle online scams.

Earlier, Anwar expressed concern over the volume of losses due to online scams.

“Overall, such scams resulted in RM286.2bil in losses in Asean while RM1.224bil in losses were recorded between January and October this year in Malaysia,” he told Suhaizan Kaiat (PH-Pulai).

“This includes online scams, telecommunication scams, e-trading scams, e-financing scams, love scams, non-existent loans and online investment scams,” he said.

The Prime Minister said the number of mule accounts being used for such scams is also alarming.

“Although Semak Mule has been successful, the figures are still worrying.

“As of Oct 31, a total of 181,628 telephone numbers, 222,092 bank accounts and 1,395 companies were recorded in Semak Mule for being involved in online scams,” he said.

The Semak Mule online application and website was launched in January 2019 to identify accounts used by scammers and assist members of the public.

“Some 32,066,000 searches were made with 22,200,984 responses being positive. This means there were attempts to transfer money to mule accounts, but many were thwarted due to the use of the portal,” he said.

Other preventive efforts, Anwar said, included blocking 1.4 billion dubious phone calls and 1.2 billion unsolicited SMSes.

“The Communications Ministry, through the MCMC, has also successfully terminated 118,184 phones lines while blocking access to 9,474 fake websites,” he added.

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DIGITAL WAVE of deception

Trapped in cycle of scams, victims being retargeted over 2.5 times on average

 Low digital literacy blamed for Malaysia's high victamisation rates

Stay vigilant: Victims not learning from experience is among the factors contributing to them being revictimised.

KUALA LUMPUR: Malaysia has the highest rate of online fraud revictimisation in Asia, with victims being retargeted over 2.5 times on average, according to the Asia Scam Report 2024 issued by the Global Anti-Scam Alliance.

CelcomDigi head of sustainability Philip Ling said the report also revealed that Hong Kong and Thailand ranked second and third respectively.

“There are two concerns, namely victims being repeatedly targeted by scammers and their low ability to differentiate artificial intelligence scams.

“The victims don’t learn from experience. It is concerning when they fall victim again because they lack the ability to differentiate between sources ... when contacted by authorities, they often cannot tell whether the caller is real or fake,” he said, Bernama reported.

He said this to reporters after attending the Anti-Scam Engagement Session, “It’s a Matter of When”, at the Tun Abdul Razak Broadcasting and Information Institute here, which saw the participation of over 100 staff from agencies under the Communications Ministry, including the Information Department, the Malaysian National News Agency (Bernama) and RTM.

Ling said the event on Monday provided participants with an opportunity to share information and advocate against crime in a manner that is clearer and easier for the public to understand.

“We need to know that scam victims do not get an adequate support system from the people around them.

“They feel scared, ashamed and unsure of where to seek help,” he said.

One of the participants, Abdul Wahid Abdul Mutallib from Bernama, said that such programmes should be expanded, particularly to the community, as they provide valuable new information and knowledge.

“This kind of programme is very good because it can raise awareness among the public, especially as we are in the age of AI,” he said.

Echoing similar sentiments, another participant Mohd Salehuddin Mohd Kidin expressed hope that more programmes focused on online fraud awareness would be organised at the grassroots level.

“Through courses like this, participants are given exposure on how to ensure that all information is accurate before making any online transaction,” he said.

Earlier, Communications Minister Fahmi Fadzil said online fraud is one of the government’s main focuses in addressing the rise in cybercrime cases, including online gambling, cyberbullying and sexual crimes against children.

In response to this, the government has decided to implement a regulatory or licensing framework for social media and internet messaging services, effective Jan 1 next year.

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Your first line of defence, tracking scams: National Scam Response Centre (NSRC), 997 hotline, National Fraud Portal (NFP), emakMule portal

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A web of scum and villainy, Scam complaints in Malaysia up 300% since 2019

PETALING JAYA: They were professionals in the field of finance, banking, accounting, education and information technology, and were well aware that cyberspace was rife with scams.

However, this did not shield even them from being scammed by a syndicate with members posing as seasoned stockbrokers supposedly from well-known investment firms based overseas.

A frugal and astute investor, finance manager Ken Wong – who lost over RM450,000 – had made wise financial choices throughout his working life, building a secure nest egg for his future and family.

With a background in accounting and being savvy in financial matters, the 41-year-old employee of a logistics company never expected to find himself ensnared by a deceptive investment scheme.

Although he was aware of scams in cyberspace, all it took was six weeks of cunning, convincing and crafty assurances by scammers before Wong was ripped out of his hard-earned savings.

“I am very thrifty and careful with my expenditure, saving as much as I can for my family, and this is really devastating.

“What if this happens to someone in their old age? It would engulf that person with hopelessness. This is why I would label these scammers as nothing less than ‘murderers’ as they can kill a person by snatching away their sanity and future,” he said.

Still reeling from his loss, Wong said it all started in May when he spotted an advertisement on Facebook that offered insights and short courses on foreign stock investments.

Out of curiosity, he clicked on a link and was promptly greeted by a person who introduced him to the courses, which were being offered for a fee of RM364.

He was then added to a WhatsApp group where lessons were conducted by several foreigners.

Wong said at first, the group only discussed matters related to the course and shared tips on stock investments.

(Click To Enlarge)

However, weeks later, the scammers, claiming to be foreign institutional investors (FIIs), started introducing and encouraging investments in foreign initial public offering (IPO) stocks, assuring him he could double his money.

Wong said he downloaded the company’s application and what started with a RM10,000 investment led to him pumping in more funds until he realised he was being deceived by bad actors.

He later learnt that the scammers had cloned real-time foreign stock exchange webpages and created features that convinced their victims to believe they were managing their own funds.

“They were so convincing and persuasive, encouraging us to manage our own investments.

“Having downloaded their app and transferring my funds to local business bank accounts were other factors that had me into believing it was a legitimate business,” he said.

“On record, my investment had doubled, but I could not make any withdrawals. When I questioned them, they demanded I invest another RM1.7mil if I wanted to make withdrawals. This is when I realised I had been fleeced.”

Wong said he was in touch with nine other victims including other professionals in the field of investment and finance, and they formed a group to seek avenues to recover their lost funds.

Another victim, who wanted to be known only as Queenie, said she decided to join the scheme after seeing it on Instagram.

“I felt confident because the scammers had fraudulently used the photos of a well-known investment influencer to promote their scheme. They claimed we could receive returns of over 400%.

“Now that I have lost my life savings, there are feelings like anger, sadness and denial.

“I think I am going through depression,” said the 46-year-old banker, who lost over RM230,000, part of which she had borrowed from a friend.

A 41-year-old private university lecturer said he lost RM120,000 of his savings and from his parents’ retirement fund.

He said he was invited to join a WhatsApp group by a woman who claimed to be a Singaporean.

“She told me that she was invited by the government to educate Malaysians on stock investments and encouraged me to join her classes. No payments were demanded in the beginning, but we were then lured into investing after weeks of receiving tutorials on stocks,” he said.

Siva, a 32-year-old office administrator, said he lost RM200,000 that he had partly borrowed from his family.

“I had saved the funds to buy a house as I am getting married soon. I do not know how to break this news to my family,” he said.

All four victims have lodged police reports.

The syndicate, operating under the guise of being stockbrokers, was busted by commercial crime police in September when 17 suspects aged between 23 and 52 were held.

Police said the syndicate had raked in over RM33mil from victims and at least six more suspects are being hunted, with 66 police reports lodged since January.

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Scam complaints in Malaysia up 300% since 2019

PETALING JAYA: Complaints and enquiries on scams and unlicensed activities shot up by over 300% between 2019 and 2023, according to the Securities Commission (SC).

The commission’s Investors Alert List sighted by The Star also revealed that some 15 sites were flagged by the SC for operating as potential clone entities so far this year.

Clone entities are outfits that misuse the name and credentials of legitimate financial and investment bodies.

In the SC’s 2023 annual report, it was revealed that the regulator received 3,262 complaints and enquiries on scams and unlicensed activities – a 321% increase within those four years.

The SC said social media platforms such as Facebook and messaging apps like Telegram continue to be the primary mode for perpetrators to carry out their illegal activities.

“A new modus operandi observed in 2023 was the use of e-wallets and cryptocurrency as the mode of payment involving investment scams, compared with the mule bank accounts that were used previously.

“This may be designed to avoid easy detection and prompt interventions by enforcement agencies,” it added.

In addition to taking action based on complaints and enquiries, the SC has also dedicated a unit to proactively monitor and detect unlicensed activities and online scams targeting Malaysians.

As of Dec 31, 2023, a total of 569 URLs offering unlicensed activities to Malaysians were detected online.

This was a 49% jump from the 382 URLs detected in 2022.

“Of these, 51% were from Telegram, 27% from Facebook, 9% from Instagram and 13% from other sources such as websites, YouTube, and TikTok,” the SC said in its report.

The issuance of cease-and-desist notices, social media interventions, inclusion in the SC’s Investor Alert List, and the blocking of websites with assistance from the Malaysian Communication and Multimedia Commission (MCMC) were among the actions taken against such sites.

Other actions were requests to block Telegram, Facebook and Instagram accounts; referrals to other agencies or foreign regulators; and lodging police reports.

“The SC has and will continue to proactively disrupt the activities of scammers and operators of unlicensed activities,” it said.

In this regard, the SC includes the names of entities and individuals found to be carrying on scams or unlicensed activities on its Investor Alert List as soon as possible – in most cases within 48 hours of receiving a complaint, it added.

The regulator noted that while some unlicensed activities are carried out locally by Malaysians with a local presence, there are also foreign entities carrying out unlicensed activities in Malaysia.

To create greater awareness, the SC said it has released a “more robust, dynamic and mobile-friendly” Investor Alert List called the Investment Checker, which serves as a one-stop centre for the public to check and verify the legitimacy of entities and individuals.

It has also set up a Scam Meter page and does radio and television interviews on scams and unlicensed activities.

Recently, the Finance Ministry told Parliament that the SC had blocked nearly 200 social media sites and over 100 websites linked to illegal investment schemes, placing 184 entities on a watchlist and filing charges against some.

Offshore platforms were blocked with help from MCMC, while the SC advises public awareness on fraudulent tactics.

Your first line of defence, tracking scams: National Scam Response Centre (NSRC), 997 hotline, National Fraud Portal (NFP), emakMule portal

 

Boosting efficiency: A woman reading about the NFP, which is poised to greatly enhance the process of scam reporting and fund tracing. — AZHAR MAHFOF/The Star

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The platform’s ability to centralise and standardise fraud reporting across play its part and stay vigilant against scammers, say police

Public must play its part and stay vigilant against scammers, say police

KUALA LUMPUR: Check before your click, say the police.

Bukit Aman Commercial Crime Investigation Department (CCID) director Comm Datuk Seri Ramli Mohamed Yoosuf has urged the public to use the SemakMule portal (https://semakmule.rmp.gov.my/) before making any financial transaction online.

“Use the SemakMule portal to verify and check the list of mule bank accounts, phone numbers and shell companies used by scammers.

“The portal was established in 2020 to list phone numbers and mule bank accounts, but it has since been improved to (include) the names of shell companies,” he told The Star yesterday.

Comm Ramli said that so far, a total of 216,074 mule accounts have been listed on the site along with 178,006 phone numbers used by scammers.

“We also listed a total of 3,904 shell companies used by scammers,” he added. 

Some 27 million visitors have logged in to the portal since its inception, and about one million of the searches have been positive, meaning transactions made to mule accounts were prevented.

Comm Ramli hopes that the public would be able to fully utilise the improved SemakMule portal to prevent from getting scammed.

“We will never relent in our enforcement efforts against scam syndicates, but we hope the public can play its part by staying vigilant,” he said.

Comm Ramli said scammers are coming up with new modus operandi to dupe victims into giving them their money, including using generative artificial intelligence to produce fake videos, as well as audio and text messages.

“Scammers are resorting to new and innovative ways to dupe victims. We have encountered cases recently in which scammers used deepfake technology to mimic the voice of a victim’s friend to dupe them.

“Use the SemakMule portal to prevent being scammed. The public can also report any scam to the National Scam Response Centre (NSRC) by calling the 997 hotline,” he added.

According to Comm Ramli, other methods used by scammers include advertising dubious investment schemes on social media and phone scams, where scammers call up victims posing as officers from government agencies.

Meanwhile, on the establishment of the National Fraud Portal (NFP), Comm Ramli said it was a good anti-scam effort.

“We welcome the NFP, especially when it can further enhance the role of the NSRC in detecting scams faster, (enabling us) to help the victims.

“It will certainly boost the fight against scams,” he said.

Comm Ramli also hopes that financial institutions will be able to fully utilise the NFP, to enhance security measures.

“It (NFP) is a step in the right direction but at the same time, we urge banks and other financial institutions to upgrade their security, both internally and externally against any threat be it malware or ransomware.

“We also hope they will be able to better secure the data of their customers as well,” he said.

This year alone, over RM1.6bil in losses have been recorded from commercial crimes, including scams, Comm Ramli noted.

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