Scratch-and-win scams: blame everybody else!

Scratch and win and other scams have been going on in the country for many years now. The most distressful development of this mode of openly cheating consumers is the standard response from the authorities: The victims are to be blamed for being gullible.

While this is true to a fair extent, what bothers consumers is, why is such an illegal activity continuing to flourish in all parts of the country, in the small towns even?

CAP has been speaking up on this matter for many years and we have continuously taken it up with the authorities. We blame it on enforcement and lack of good laws for any effective crackdown on this well-established form of cheating.  Can something be done about it?

We believe that a lot can. The first step should be massive, and continuous, campaigns to educate the public, followed by, of course, effective enforcement. The enforcement agencies too must be given education, otherwise they will, as is always done these days, transfer the blame on victims for being gullible and ignorant or greedy.

Our understanding is that these scratch-and-win companies are set up legally, and often launched by a Minister, or by someone in power. When everything goes bust, the directors go into hiding and are not traceable.  Why is this so?

In one case, when CAP asked the Companies Commission of Malaysia to trace the directors of one such company through their NRD details, the commission officers had the audacity to say that, despite the records, they were unable to find the persons. The next thing you know is that these directors will be setting up another company to continue with their game.

There seems to be a sense of hopelessness in tackling this problem. Consider the despairing response from a person who has been active in helping people with their complaints and problems for many years – the head of MCA’s Public Services and Complaint Department, Datuk Michael Chong:

“I am completely lost, and have failed miserably in the war against these syndicates… scratch-and-win scams pose the biggest challenge for me in my 23 years of service to the people.”

This is what Chong told reporters at a press conference on Oct 1 this year. And he was terribly upset that despite holding more than 38 press conferences about these scams over the past 10 years, the numbers of people getting duped were increasing.

Chong said his department received 33 cases of scratch-and-win scams involving losses totalling RM167,350 so far this year, while last year, he received 52 cases amounting to RM254,630 in losses.

According to Consumer Claims Tribunal chairman Pretam Singh, the tribunal handled 338 scratch-and-win cases up to September this year, with the highest number of cases, 173, occurring in the Federal Territory of Kuala Lumpur.

And, going by a news report dated Aug 20 this year, more than 2,000 people in Johor have fallen victim to scratch-and-win scams since 2006 and the number of cases has been rising daily.

To this, the Domestic Trade, Cooperative and Consumerism Ministry’s response was a promise to intensify its efforts to combat scratch-and-win scams nationwide.

Deputy Minister Datuk Rohani Abdul Karim said on Aug 29 that among the efforts planned were creating more awareness on such scams in the various newspapers, as well as broadcasting commercials warning people against them.

“We are also planning to emphasise more on the importance of the Consumer Claims Tribunal,” she said.

Now, where is the enforcement? This is cheating. Isn’t there a law to crack down on this, and is this why the victim has to go to the Tribunal?

On Oct 9, another Deputy Minister in the same ministry, Datuk Tan Lian Hoe, announced that companies engaged in scratch-and-win scams will now have to pay a fine of RM1 million if they are found guilty under a recent amendment to the Direct Selling Act 1967.

A second-time offender will be fined RM2 million. Individuals involved in the scam will face a maximum RM250,000 fine and jail up to five years as a first offender, while individual repeat offenders face fines of up to RM500,000 and 10 years’ jail.

You can have laws, but of what use are they if there is no enforcement? Especially in cases where the modus operandi is always the same: The “lucky winner” is promised a lucrative deal of good returns, to be redeemed upon payment of a small sum initially. But this small, initial sum can run up to RM5,000, if the person wins a Toyota Altis in the scratch ticket.

CAP calls on the Government to take this lucrative business of cheating through scratch-and-win scams greater attention and to end such scams once and for all.

We want the Government to enact a specific law to tackle this crime, and to post effectively trained enforcement personnel on the ground to end the menace.

Threats of million ringgit fines and jail sentences will have no meaning if there is no effective law or enforcement.

Letter to Editor, 25 October 2010