The article is originally published by Lee Ming Keong at SmartInvestor
Scammers have upped their game by using the latest technology buzzwords to deceive unsuspecting individuals
We often hear the sad stories of how retirees were duped into parting with huge chunks of their retirement savings by investing in get-rich-quick schemes. If you think that only gullible retirees end up being victims of con artists, then you are dead wrong. Many young adults and middle-age individuals have also fallen prey to these unscrupulous conmen who entice the gullible and the greedy into investing into too-good-to-be-true investment schemes and programmes. Interestingly, the scammers have leveraged on new technologies to give them more ammunition in their quest to deceive unsuspecting individuals. The have weaved buzzwords such as artificial intelligence (AI), block chain, and big data analytics into their deceptive schemes, often targeting the younger generation who are more open to the latest technologies. Security systems expert Fong Choong Fook, director of LE Global Services Sdn Bhd, agrees the pervasiveness of the Internet has contributed to an increase in online scams. “However, it is not just the internet, but advancement of technologies that has given scammers more options to carry out their work. They are intruding into the lives of ordinary people.
“IT IS NOT JUST THE INTERNET, BUT ADVANCEMENT OF TECHNOLOGIES THAT HAS GIVEN SCAMMERS MORE OPTIONS TO CARRY OUT THEIR WORK. THEY ARE INTRUDING INTO THE LIVES OF ORDINARY PEOPLE WITH E-MAILS, SOCIAL MEDIA, INSTANT MESSENGERS, ONLINE ADVERTISEMENTS, ETC.”
with e-mails, social media, instant messengers, online advertisements, etc. “On top of that, we also have online payments, e-wallet payment transfer, crypto-currencies and initial coin offerings (ICO). All this convenience for us have also become a convenience to the scammers (to scam the unsuspecting).”
Targeting gullible investors
To target investors, Fong says that scammers would typically make use of the latest IT buzzwords such as AI, block chain, big data analytics, Internet of Things, 5G technologies, and Industrial Revolution 4.0.
He warned investors that many pyramid scheme operators are now are using such buzz words. “Typically, these schemes will yield ridiculous returns (in percentage terms) in contrast with traditional instruments.” “And this is exactly what the scammer would leverage on, by claiming that new technology investments are unlike conventional investment instruments. And that it is absolutely believable for technology investments to yield unreasonably high returns,” Fong explains. He says it is recommended that any investment schemes focusing on latest technologies be validated by third party advisers or experts, and backed by data and statistics or publicly recognised white papers. “Any future promises arising from such potential investment opportunities should be verified and validated thoroughly,” he says, adding these are measures that can help us to make a sound decision and not fall prey to scams.
It remains a mystery why many educated, level-headed and mature people get scammed. In trying to explain why this happens, Fong says the most common way for scammers to pull off a scam operation is to first instill fear in their intended victims. There are two key aspects to this – the fear of getting into serious trouble and the fear of losing out on a financial windfall. Fong explains the fear of one getting into trouble is typically used in the ‘Macau Scam’. A recent victim of a Macau-type scam was an engineer at a factory in Bayan Lepas, Penang. News reports last October revealed he suffered losses amounting to RM24,300 after being duped by a Macau Scam syndicate claiming he was involved in money laundering and drugs. Such scams work by creating fear and panic in the victims, clouding their judgement and eventually resulting in them parting with a huge sum of money. Being cold-called with claims that you’re involved in some sort of crime is often enough to strike fear and panic into most people, and that’s when they lose their head and unfortunately for some, their money as well.
BEAR IN MIND THAT SCAMS TARGET PEOPLE OF ALL BACKGROUNDS, AGES AND INCOME LEVELS ACROSS MALAYSIA. THERE’S NO ONE GROUP OF PEOPLE WHO ARE MORE LIKELY TO BECOME A VICTIM OF A SCAM, ALL OF US MAY BE VULNERABLE TO A SCAM AT SOME TIME.
Loke says scammers also prey on victims by instilling the ‘fear’ of losing potentially golden opportunities to make a great return on investment. “And this type of fear is difficult to distinguish because it ties back to the human instinct of greed. “Unfortunately, we are living in a fast pace world, and opportunities really go to the ‘early birds’. Nevertheless, if there are any technology-related opportunities, it is far safer to do complete research first before rushing into it. Do not simply follow the crowd,” he says. Greed-related scams typically involve scammers telling victims the y are the winner of a valuable prize, but due to certain circumstances, it can only be released to them after they paid a fee.
Misusing the name of regulators
Ironically, scammers often link financial regulators like Bank Negara Malaysia (BNM) in their devious schemes by misusing the central bank’s name, corporate logo, the names of senior officers and even the BNM Governor! BNM has provided a number of alerts to the public via its website and announcements on such scams.
It advises the public to stay alert and ignore phone calls, letters, text messages or e-mails claiming to be from Bank Negara Malaysia, which directs the recipient to a website that requests for personal information. It adds that BNM and financial institutions including credit card issuers will never request for personal banking information when contacting customers, be it via telephone calls, SMS or emails. It will also never ask individuals to transfer money for safekeeping.
Cyber fraud on the rise
CyberSecurity Malaysia CEO Datuk Dr Amirudin Abdul Wahab says scammers are getting smarter and taking advantage of new technology, new products or services and major events to create “believable stories” that will convince you to give them your money or personal details. “Cyber criminals are getting increasingly sophisticated in their attempts to get money or personal details from internet users. As a digital user, be alert and protect yourself from being scammed by following some best practices safety tips. “Bear in mind that scams target people of all backgrounds, ages and income levels across Malaysia.
There’s no one group of people who are more likely to become a victim of a scam, all of us may be vulnerable to a scam at some time. Amirudin explains that scams succeed because they look like the real thing and catch you off guard when you’re not expecting it. He adds that among the cyber security incidents reported to CyberSecurity Malaysia, fraud has always been one of the most reported incidents. “Fraud has become one of the most popular attacks launched by attackers due to the lucrative amounts of money they generate out of fraudulent activities.” He says the targets are mostly individuals, but the trend is now moving towards targeting online business due to the high monetary gain compared to targeting individuals.
The various modus operandi used in fraud activities including phishing, emails with malicious attachment and social engineering, he adds. Cybersecurity experts have warned online consumers to be wary of e-commerce fraud especially during sales events such as the recent mega 11.11 sales. Fraudsters take advantage of such opportunities to prey on online buyers by offering them “too-good-to-be-true” prices.
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