DESPITE the best efforts of the National Scam Response Centre (NSRC), scams continue to rise, severely impacting the financial, psychological and social well-being of consumers.
According to the NSRC, overall losses due to scams totalled RM1.34 billion in 2023. Notably, investment scam losses more than doubled from RM209 million in 2022 to RM437 million in 2023, an increase of over 109% within a year.
Those affected by scams are not only ordinary consumers but also includes professionals, the educated and the articulate. Thus, every consumer can be a potential victim of a scam.
Recognising that losses due to scams may be difficult to recover despite the best efforts, the best protection is to be vigilant.
Furthermore, scammers are continuously innovating new forms of scams, such as embedding malware in wedding invitation cards or using the latest government assistance schemes to deceive consumers.
It is vital that scam awareness and education programmes be strengthened to make them more effective. A one-size-fits-all strategy may not be sufficient.
Different demographics may be exposed to various forms of scams. For example, youths may be more exposed to job scams, young working adults to cryptocurrency scams and mature adults with savings to investment scams.
To ensure effectiveness for each group, the right messaging and medium of awareness delivery must be ascertained.
For the younger group, TikTok or YouTube videos may be the appropriate medium. For others, face-to-face talks maybe the best way to deliver these messages. Printed posters and brochures may also be an effective medium of delivery.
The focus of education programmes is not just about delivering knowledge but helping consumers identify when a scam is being executed, and more importantly changing consumers’ behaviours to be proactive in protecting themselves from scams.
Consumers must be exposed to the multiple strategies used by scammers to manipulate consumer behaviour.
Strategies include fear-based such as impersonating police officers, income tax officers or anti-corruption officers. They often involve urgency or tight deadlines, for example, threatening arrest, charges for money laundering or significant financial loss if not acted upon “immediately”.
High returns requiring urgent action are also common.
Secondly, the NSRC must coordinate efforts with other agencies such as the police, Central Bank, telcos, Securities Commission and other related organisations to protect consumers and react quickly and efficiently once a scam is reported to ensure the maximum possibility of full recovery of lost monies.
The NSRC should also explore new partnerships, including online selling platforms and social media platforms, which can play a major role in preventing scams.
Thirdly, in Malaysia, when a consumer is scammed, they often bear the brunt of the losses. In Singapore and many other jurisdictions, regulators first examine if the banks have undertaken the fullest security measures to protect consumers and if telcos have acted responsibly before holding consumers accountable. This is the concept of shared responsibility.
The NSRC’s priority should be to work towards shared responsibility among all stakeholders to ensure the best efforts are in place to prevent or mininise consumers’ losses.
Fomca (Federation of Malaysian Consumers Associations) deeply hopes that shared responsibility will be a priority of a reformed NSRC.
To minimise scams, if not eradicate them completely, Fomca strongly hopes that the reformation of the NSRC will ensure greater efficiency and effectiveness in protecting consumers from falling victim to scams.
Consumer empowerment is important but the relevant agencies, especially banks and telcos, must also take strong measures to protect consumers, failing which, they should bear some responsibility. That is only fair.
Dr Paul Selva Raj
Deputy President
Fomca
