Over the years, Malaysians have lost billions to online scams. Experts say there are telltale signs in unsolicited email and social media messages that can help one avoid being defrauded.
PETALING JAYA: A former company manager invested over RM2 million in an online crypto investment scheme, only to lose all his money. This is an all-too-familiar story. In December last year, digital minister Gobind Singh Deo said more than 95,800 cases of online scam were reported from January 2021 to April 2024, resulting in losses amounting to RM3.2 billion.
Deception is key in investment fraud, according to experts. Generally, victims are reached through social media, networking groups, and public chat groups such as WhatsApp and Telegram with promises of huge payouts if they put their money in selected investments. Scammers usually work in groups, and in each chat group, the perpetrators may plant a few “investors” to talk about the “gains” they have made.
At times, victims may even get some small returns to hoodwink them into believing that those behind the investment are genuine, thus drawing them deeper into the lie. By the time they realize they have been duped, it will be too late.
Making the wrong turn
The notion that smart people don’t fall victim to scams is a fallacy. For instance, greed gets the better of everyone, including those with college degrees. Smart or otherwise, up to 15 Malaysians fell for such scams every day in the first nine months of last year.
From January to September 2024, there were 4,355 cases of scams, and in 82% or 3,574 of them, the victims were fooled by advertisements on social media and chat groups, according to Bukit Aman Commercial Crime Investigation Department director Ramli Mohamed Yoosuf.
Tell-tale signs
Online scam is a global phenomenon, and law enforcement agencies of most countries continue to warn their citizens against falling victims to such fraudulent schemes. For a start, getting unsolicited investment offers – by email, social media, or mobile apps such as Telegram and WhatsApp – should already get the alarm bells ringing. This is especially so when such offers come with promises of huge returns that, in reality, are too good to be true.
Apart from that, potential investors are told that these are very low-risk investments and there is little capital outlay. However, there is usually no solid track record to show for those “gains.” More often than not, victims are told that this is an opportunity they should not miss, and that it is urgent to decide quickly. Unfortunately, the display of urgency usually sounds so convincing that the victim swallows the bait.
Scams are aplenty
Scams come in as many shades and colors as the fraudsters behind them. Among the more notorious ones is the Ponzi scheme, named after Italian swindler Charles Ponzi who started it in the 1920s. Ponzi schemes are based on a very simple strategy – promise big returns for the early investors, then use the money from subsequent investors to pay them.
Scammers tend to use a lot of jargon in their chats with victims, and for those who are not familiar with financial or investment terms, all this talk sounds convincing, even credible. On the other hand, a closer examination will reveal that any information given in those chats is actually vague, the business model is usually unclear, and there is no attempt to be transparent.
The modus operandi
It usually starts with an innocuous WhatsApp or Telegram invitation to join a fake chat group, with the names of familiar or popular financial experts and well-known investment agencies thrown in to build confidence. Scamming is a team effort. The administrator of the chat group is usually the one who offers the victim the opportunity to invest in an almost “sure bet.” Others, who act as fellow investors, will then provide fake testimonies and use complex financial terms to lure the victims into putting money in their schemes.
Consequences
The obvious result of being scammed is that you lose all your money, making you a bankrupt. Whatever funds you have put aside for emergencies will also disappear. Worse than that, even those who have already been scammed, and would have become more familiar with the investment landscape, may not learn from their experience.
Precautions to take
One way to avoid falling victim is, of course, to ignore all such offers however promising they are. On the other hand, there may be genuine ones in the mix, and to separate the real from the fake, it is best to put in some work. A thorough research is a good start. Find out everything you can about the company or individual making the offer to determine if they are legitimate. Check and ascertain the authenticity of chat groups, social media networks, or any other online platforms. Take every piece of advice on market movements by financial or investment experts with a huge spoonful of salt. Ask questions, look for clarity in the details, and don’t make snap decisions.
Don’t wire any money to an account until you are sure that it is authentic and legitimate. Leave chat groups and channels on social media networking apps such as Telegram and WhatsApp if anything raises your suspicion. Never click on any suspicious link and avoid having your personal details readily available to automatically fill out online forms. Never put your money in investments that promise unrealistic returns, even if you desperately need extra cash.
In light of recent SMS phishing attempts misusing bank names, always take note that banks will never send SMS messages containing links. Avoid clicking on links or responding to calls or text messages that appear suspicious. Instead, verify their authenticity directly through official channels. Remember to always read the content of OTP/Secure TAC carefully before proceeding with any transactions to prevent approving unauthorized transactions.
If you are caught in such a scam or know of one, the first thing to do is leave every suspicious chat group or channels that you may be a member of. If you suspect you have been scammed, immediately call the number on the back of your bank card which is available 24 hours to freeze your account, or the National Scam Response Centre at 997, from 8am-8pm daily, including public holidays. Also, lodge a police report to ensure that further investigations are carried out.