DESPITE the best efforts of the National Scam Response Centre (NSRC), scams continue to increase, severely impacting the financial, psychological, and social well-being of consumers. In 2023 alone, according to the NSRC, RM1.34 billion was lost to scams. Losses to investment scams more than doubled from RM209 million in 2022 to RM437 million in 2023.

Those conned by scammers include professionals, the educated, and the articulate. Clearly, everyone is a potential victim of a scam. The best protection is self-protection. Once you are a victim, the possibility of recovering your losses is slim indeed.

Scams are continuously evolving. The latest con, for example, involves embedding malware in wedding invitation cards and using the latest government assistance schemes to deceive consumers.

It is vital that scam awareness and education programmes be strengthened for better effectiveness. A one-size-fits-all strategy may not be effective. Different demographics may be exposed to different forms of scams. For example, young people may be more exposed to job scams. Young working adults may be attracted to cryptocurrency scams. Mature adults with savings may attract investment scams.

The right medium must be used to reach out to and educate the target group. For the younger group, TikTok or YouTube videos may be the appropriate medium. For others, especially the elderly, face-to-face talks may be the best way to deliver the message.For still others, printed posters and brochures may be the effective medium.

The education programme must help consumers to recognise a scam. It should help to change the behaviour of consumers so that they are protected from scams.

Consumers must be exposed to the multiple strategies used by scammers to manipulate consumer behaviour. Scammers use multiple emotional manipulation strategies to trick consumers. They use fear-based tactics such as impersonating a police officer, income tax officer, or anti-corruption officer. They also frequently involve urgency or tight deadlines, for example, someone will be arrested, charged with money laundering, or suffer a major financial loss if the victim does not act at once. The scam might offer high returns for which the victim must act quickly to earn.

The NSRC must coordinate the efforts of all the regulatory agencies, including the police, central bank, telcos, and the Securities Commission, to protect consumers and react rapidly and efficiently when a scam is reported to to recover the lost money,

The NSRC should also consider new partners, such as social media and shopping platforms and the media, in its campaign to prevent scams. 

Currently, when a consumer gets scammed, he bears the full brunt of his losses, even if the banks or telcos did not act responsibly to protect him. In Singapore and in many jurisdictions, the regulators first examine if the banks and telcos had taken the fullest measures to protect the consumer. Only then is the consume held responsible. This is the concept of shared responsibility.

The NSRC’s priority should be to work towards shared responsibility to ensure that the best efforts are taken to protect the consumer.  This is only fair to the consumer. Fomca hopes that shared responsibility will be a priority for the reformed NSRC.

To minimise, if not eradicate scams, the NSRC must be reformed for ensure greater efficiency and effectiveness against scams. Consumer empowerment is important. But the relevant agencies, especially the banks and the telcos, must also take strong measures to protect consumers. They must bear some responsibility if they fail to do so. That is only fair. – June 26, 2024.

* Paul Selva Raj is Fomca deputy president. 

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.