CAP: Subtle dangers lurk behind online transactions

Malaysia is one of the fastest-growing online markets in the ASEAN region. Malaysians use the internet extensively for news, research, social networking and online shopping. With 19 million people online we have the highest penetration of online shoppers supporting a RM25 billion business which is poised to double by the year 2020. However, are all online shoppers prepared to swim in an ocean infested with sharks?

Ecommerce is on the rise owing to several advantages such as the convenience of shopping online, price advantages, exclusive deals and availability of reviews. Booking of airline tickets, hotel rooms, cinema tickets, payment for utility bills, transaction with government agencies and banking have all gone online. Consumers making transactions with such sites or popular online shopping sites seldom face any issues, provided they follow proper procedures and don’t get conned by phishing sites.

Issues mostly arise when consumers purchase items through social media sites. These sites are run by small companies or individuals who do not provide adequate security features and secure payment methods. That is also where unscrupulous parties prey on unsuspecting consumers and get away unpunished.

According to Digital News Report 2017, Malaysians were found to be the world’s largest users of WhatsApp at 51 per cent. Facebook and YouTube are also popular at 58 per cent and 26 per cent users respectively, WeChat and Instagram, with 13 per cent. With these statistics it can be quite scary how many consumers are potentially in danger of being taken for a ride.

Consumers’ Association of Penang (CAP) has received about 50 complaints over the last one year on a variety of online scams. This is only the tip of the iceberg as the actual number is believed to be much bigger since many of the complainants were reluctant to pursue the matter further when told of the procedures to recover the amount. Often the expenses incurred were more than the claims they were seeking.

In one unique case brought to the attention of CAP, the complainant had failed to qualify for a bank loan. He had been observed by a man claiming to be a loan agent who offered to get him a loan easily and speedily. The complainant gave his bank debit card and other personal details to the agent.

From his bank statement he noticed that his account which was at minimum level suddenly became very active with transactions going in and out. Then he was arrested by police in connection with several police reports made against him, but he could not understand why.

Later he found out that his agent had advertised brand new scooters for sale at RM1,000 each on Facebook. The buyers were required to deposit the RM1,000 into this particular bank account. An estimated 200 people deposited their money into the account and waited for their scooters which were never delivered. Meanwhile the agent disappeared.

According to media reports one week ago, the Kuala Lumpur Commercial Crime Investigation Department chief ACP Mohd Luthfi reported that there were139 cases of bogus online loans in Kuala Lumpur last year amounting to RM3.7 million.

ACP Mohd Luthfi explained that the victims were normally people suffering from cash flow problems who needed money urgently. They were tempted by advertisements on social media with attractive terms such as low interest rate; no guarantor or collateral requirement; immediate approval; hassle-free applications for even those blacklisted by banks being qualified. The scammers disappeared with the loan processing fees. As the fees was usually quite small the victims didn’t lodge any report and that encouraged the scammers to continue their fraudulent practice.

Even more scary were cyber attacks that were launched in the Asia Pacific region in recent years affecting large populations. The countries affected did not disclose any statistics. In Malaysia, a number of Automated Teller Machines (ATMs) have been affected by overseas hackers and this was understood to have been owing to outdated Operating Systems in ATMs.

Scammers are becoming smarter by the day as technology evolves and they keep changing their modus operandi. Therefore, consumers making transactions should be discreet and keep themselves updated on the activities of the underworld in cyber space. When in public places avoid making online transactions. Also be wary of scanning Quick Response (QR) codes in public places, as criminals paste their own QR codes over the original ones. Also avoid get rich schemes.

In conjunction with World Consumer Rights Day themed, “Making Digital Marketplaces Fairer” on 15 March 2018, CAP urges the authorities to keep publishing latest updates on how to beat cyber crime and the statistics of cyber crimes. The authorities should track down the criminals and mete out the maximum penalty to discourage others from jumping into the bandwagon. Banks should update Operating Systems in ATMs frequently.

Letter to Editor, 14 March 2018