Greater advancement in financial technology (fintech) has led to proliferation of scams and unlicensed activities, as the nation pushes for heightened public awareness on investment, warned Madam Yew Yee Tee, the General Counsel of Securities Commission (SC) Malaysia.
In 2023, the SC received 3,262 public complaints and enquiries on various scams and unlicensed activities, a 321% increase from 2019.
As of 3Q2024, a total of 3,380 complaints and enquiries have been received, marking an increase of 28% compared to last year. Notably, these new cases involve more sophisticated fraudulent schemes using deepfake technology and ever changing modus operandi.
Thankfully, there has been greater public awareness and scepticism where many of the complainants and enquirers who have come forth to the SC have not fallen victims to the scams (as compared to the previous years).
According to the General Counsel, most scams share a common element, which is the use of a mule bank account that belongs to a victim who has been persuaded to rent out his or her bank account to be utilised by scammers to illegally receive and transfer ill-gotten funds.
The public should never allow their bank accounts to be used as a mule account as the monetary reward offered is not worth the while, she noted.
Since 2022, the SC has acted against 19 mule account holders for receiving proceeds stemming from unlawful activities, where punitive actions included imposition of fines in the hundreds of thousands.
In July this year, the Penal Code (Amendment) Bill 2024 was passed at Dewan Rakyat to combat online crimes utilising mule accounts where mules can be fined a minimum of RM10,000 and jailed at least one year if found guilty.
Additionally, offenders may also face other consequences such as not being allowed by banks to maintain or open bank accounts resulting in these individuals facing difficulty in securing employment or operating a business.
In fighting scams and unlicensed activities, the SC has adopted a multi-pronged approach consisting of investor awareness and education, monitoring, surveillance as well as law enforcement.
“Despite the regulatory intervention by the SC, the key challenge has always been how to get the right warnings to the right people and before they become victims as most of the times, those who need warnings most aren’t getting these warnings,” said Madam Yew.
The SC has maintained an Investor Alert List that contains 1,311 entries of scams and unlicensed activities to date.
Also, the SC has blocked more than 110 websites and over 190 social media accounts under the banner of Telegram, Facebook, Instagram, X and TikTok, that are involved in scams and unlicensed activities. This is made possible owing to the information input from the public through SC’s “Aduan” (Complaint) channel as well as the agency’s proactive surveillance.
