Arm yourselves to fend off scammers’ tactics

By: Dr Siti Aisah Bohari

Fintech (financial technology) has transformed how we manage our finances, offering convenience and efficiency that traditional methods cannot match. With just a few taps on our phones, we can make payments, transfer money, and even invest. However, this digital revolution has also created opportunities for cybercriminals to exploit vulnerabilities, leading to an alarming rise in scams, phishing attacks, and identity theft.

The scale of the problem is significant. According to the Digital Crimes Unit of Microsoft Asia, 720 people fall victim to cybercriminals every minute globally—over 1 million victims each day. Closer to home, Bukit Aman’s Commercial Crime Investigation Department reported 34,497 online scam cases in 2023 alone, leading to financial losses of RM1.2 billion. These figures highlight the darker side of fintech’s rapid growth.

Cybercriminals are using increasingly sophisticated methods to target fintech users. One of the most common techniques is phishing, where fraudsters impersonate banks or other financial institutions through fake emails or text messages. These messages often contain links to fraudulent websites designed to collect sensitive information like passwords and banking details. The National Scam Awareness Survey 2024 by CelcomDigi Berhad found that 73% of respondents had experienced scam attempts, with many of these involving scammers pretending to be officials from banks or government agencies.

Despite growing awareness of such threats, action to combat them remains inconsistent. While 87% of survey respondents were aware of scam risks, only 52% took concrete steps such as blocking scam numbers, and even fewer reported incidents to banks or the authorities. This raises an important question: If people are aware of the dangers, why are they still falling victim?

One reason is the ever-evolving tactics used by scammers. Many of these schemes are designed to create panic, pushing victims to act quickly without thinking. A scammer might claim that your bank account has been compromised or that you owe back taxes, pressuring you to share personal information. Unfortunately, these tactics are highly effective. The survey also revealed that 64% of respondents were unaware of the 997 hotline, which is a crucial tool for reporting scams in Malaysia.

Interestingly, individuals with higher incomes and more education are often prime targets. The survey found that 75% of respondents earning over RM4,000 reported being approached by scammers, compared to 60% of those earning less than RM1,000. This shows that scammers target people they believe have more to lose, making it crucial for everyone, regardless of financial literacy, to remain vigilant.

The rise of investment fraud, e-commerce scams, and phone scams has also been alarming. In the first few months of 2024 alone, over 2,000 phone scams were reported, resulting in losses of RM65.8 million. These scams are often sophisticated, promising high returns or offering deals that seem too good to be true. Once the victim is hooked, the scammers disappear, leaving them with financial losses and little recourse.

To address these growing threats, the Malaysian government has introduced legal reforms. The Dewan Rakyat recently passed amendments to Akta 574 (Penal Code), targeting the use of “akaun keldai” (mule accounts), which cybercriminals use to launder stolen money. These amendments impose penalties on individuals who knowingly allow their accounts to be used for illegal activities.

Protecting yourself from scams requires vigilance. Here are some key steps you can take to safeguard your finances:

• Verify the Source: Always ensure that any fintech app or platform you use is legitimate before entering personal information. Be cautious of unsolicited communication asking for sensitive details.

• Enable Two-Factor Authentication: This adds an extra layer of security to your accounts, making it harder for scammers to gain access.

• Use Strong, Unique Passwords: Avoid using the same password for multiple accounts. Create complex passwords that are harder to guess.

• Be Sceptical of Unexpected Messages: Never click on suspicious links in emails or text messages, especially if they ask for personal or financial information.

• Monitor Your Accounts Regularly: Keep an eye on your accounts for any unauthorized transactions. Early detection can help prevent larger losses.

• Report Scams Immediately: If you suspect you’ve been targeted, report it to your bank and the 997 hotline. Prompt action can help prevent further fraud.

As fintech continues to grow, so too do the risks associated with it. While the convenience of digital finance is undeniable, we must all remain cautious and take the necessary steps to protect ourselves from cybercriminals. The rise of scams and fraud in the digital space raises an important question: Are we truly prepared to handle the security challenges of the fintech era? It’s clear that as fintech advances, so must our awareness and efforts to safeguard our personal and financial information.

The author is a Senior Lecturer in the Department of Finance, Faculty of Business and Economics, Universiti Malaya. She may be contacted at sitiaisah.bohari@um.edu.my