Everyone a target in Malaysia's online fraud frenzy

01 Jan 2024 06:05pm
Pix for illustration purpose only. - FILE PIX
Pix for illustration purpose only. - FILE PIX

KUALA LUMPUR - Online financial fraud has become more prevalent across the globe as businesses adopt digital modes of payments and transactions. Malaysia is not spared from this growing threat.

Fraudsters are continuously evolving their approaches to exploit the vulnerabilities of the current prevention measures in place, many of whom are targeting the financial sector.

Those who fall prey to financial scams or fraud come from all walks of life including government servants, lecturers, doctors and even successful businesspeople, either involving illegal activities or lured into fraudulent schemes that guaranteed lucrative returns.

According to the Bukit Aman Commercial Crimes Investigation Department (CCID), online crime cases increased by 37 per cent from January to November this year compared to the same period last year.

The number of cases increased from 23,608 to 32,366, with a total loss of RM1.13 billion, a 46 per cent increase from last year, the department said.

"This indicates that financial fraud and scams pose a significant risk to our nation, where the direct impact of organised financial crime can lead to substantial financial losses," Deputy Prime Minister Datuk Seri Fadillah Yusof was quoted as saying.

Police believe the real figures involving victims and total losses are just the ‘tip of the iceberg’ as many cases were unreported as the victims were ashamed to report to the police given their job and social status.

A study released by Ipsos Malaysia on Dec 19 revealed that less than 50 per cent of scam victims in the country seek help from the authorities, with a silent minority taking no action at all.

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Given the current situation, experts opined that the relevant act should be amended, especially in terms of its punishment, as they said, stronger preventive measures should be undertaken to tackle online fraud.

At the same time, they also called for efforts to intensify public awareness campaigns against online crime.


Ts Syahrul Nizam Junaini, a senior lecturer at the Faculty of Computer Science and Information Technology, Universiti Malaysia Sarawak, said most cyber users lack the knowledge in detecting legitimate and fake or malicious websites, hence making them vulnerable to fraud.

"A previous study has shown that 78.5 per cent of the Malaysian population are active social media users. This means that more financial transactions are conducted online.

"This situation provides more opportunities for fraudsters to explore and exploit, by entrapping users of websites and online banking applications as well as e-wallet and e-commerce platforms without security measures for customers,” he said.

Shahrul Nizam said a strong cyber security infrastructure is essential to defend against cyber attacks as fraudsters can take advantage of loopholes in the system.

"We are cognisant of the fact that this crime is focused on WhatsApp, Telegram and short message service (sms) as these applications are widely used worldwide with millions of active users in Malaysia.

"Fraudsters also use similar applications, and as such, it is difficult for us to detect them as these bad hats have also registered their phone numbers by using fake WhatsApp or Telegram accounts,” he added.

He said every year 99 per cent of legitimate information is received by the public through WhatsApp, but when one per cent of fake information with fraud elements emerge, many who are vulnerable to misinformation, will then share them with others.

Ipsos Malaysia in its survey also said that three-quarters of the population was targeted, with an upsurge in the last quarter highlighting widespread vulnerability as 76 per cent of 1,000 respondents encountered scams.

A total of 51 per cent of respondents reported that they encountered scams in the past three months, 26 per cent in the past month and 14 per cent in the past week.


Syahrul Nizam also urged those who have fallen victim to financial fraud to step forward by lodging their complaints to the authorities.

He said the shame and stigma as well as the refusal to believe that they had been conned by fraudsters, prevented victims from reporting the crime.

According to the Ipsos Malaysia survey, only 48 per cent of 657 respondents who fell victim to a scam with financial loss or almost fell victim to a scam but realised it before any loss occurred, reported it to the authorities. However, 12 per cent did not take any action.

"Besides that, the victims might not know the procedures in making reports and lacked the awareness on this aspect, and as such they were hesitant or felt that the procedures were rather complicated, and in the end, they decided against making the report.

"Don’t stay silent. Victims only need to go to the relevant agency in their respective areas including the police station and their banks. Without the report, how will the authorities conduct an investigation?” he asked.

He said this is because data from every report received will be streamlined with other authorities including the National Scam Response Centre (NSRC), Bank Negara Malaysia (BNM) as well as the Malaysian Communications and Multimedia Commission (MCMC).


Senior lecturer at the Faculty of Science and Technology, Universiti Sains Islam Malaysia (USIM) Dr Azuan Ahmad said in the ever-evolving digital age, diverse applications have been developed in line with the latest technological trends, giving room for scammers to exploit and manipulate their victims for financial gain.

The availability of various apps which can easily be downloaded provides an easy gateway for fraudsters to access personal information including the victim’s financial details, he said.

"Being online more often increases exposure to the risk of cyber fraud as indirectly, more of our personal data are available in the cyber world and if data security is not given importance, it will only expose users to risks of thefts and data leakage.

"This allows financial scammers to access the victims’ information by using the data as bait to win the confidence of the victims before defrauding them,” he said.

Azuan also said that of late, these swindlers have also leveraged mobile applications as their modus operandi, including impersonating as a trusted individual or authority, such as the police.

"For example, by just having the full name of a victim, the fraudster can detect other personal data including the identity card number, house address, registration vehicle number and other additional data, and with the details, the victim can easily be deceived, believing that the fraudster is from a trusted authority.

"Some scammers have also developed various fake applications and after downloading the app or clicking the link, the fraudster will be able to access the victims’ banking app. Some of these fraudsters use bank logos which appear real to convince victims that they are from the legitimate banking institution,” he shared.


Azuan also said that vulnerable people in society, panicky and those lacking knowledge on the digital and cyber world are some of the factors contributing to the rise in online financial fraud in the country.

The smart fraudster knows how to manipulate emotions and take advantage of the victims’ trust and exploit their fears - especially panicky individuals - for his personal gain, he said.

"Out of panic, the victim would disclose his financial information including banking data to the scammer and in the end the victim falls prey to the perpetrator’s tactics,” he said, adding that due to the lack of knowledge on the cyber threat, the public will continue to be exposed to the crime.

In this regard, he urged the relevant authorities to step up their public awareness campaigns in addition to widely disseminating the latest modus operandi of online fraudsters.

He also called on smartphone users to download applications such as Whoscall and Truecaller that allow them to know who the caller is, hence protecting them from fraudulent calls.


Azuan also described the NSRC, which was set up last year as the best platform to combat financial scams in a more holistic and integrated manner.

The centre, he added, would consolidate resources and expertise from the National Anti-Financial Crime Centre (NFCC), the Royal Malaysia Police (PDRM), MCMC as well as financial institutions and the telecommunications industry.

"Besides creating awareness on the crime to the public, NSRC through the relevant agencies are actively conducting operations to detect ‘keldai akaun’ (mule accounts) that are used as the medium for money transactions by fraudsters.

"As a one-stop centre dealing with scams, NSRC is recognised for being able to conduct swift and integrated action towards online financial fraud including coordinating faster tracing of stolen funds and enforcement action against criminals,” he added.

Since its inception on Oct 12 last year to Nov 30 this year, calls were made to the NSRC involving losses of about RM173 million. Of the total, the centre managed to block the transaction of RM33 million of the overall losses. - BERNAMA