KUALA LUMPUR: The Securities Commission (SC) received 3,262 complaints and enquiries on scams and unlicensed activities last year, representing a significant increase of 321 per cent within five years (2019-2023).
According to its Annual Report 2023 released today, in 2019, SC received 774 complaints and enquiries on such activities.
"Over the years, we have seen many occasions where individuals or entities were duped, misled, tricked, enticed and even pressured to part away with their monies and retirement savings by dishonest and fraudulent activities that promise unreal returns and benefits that are too good to resist," the regulator said in the report.
In addition to the various types of scams, including investment scams and unlicensed activities, the SC said there were also increasing concerns observed involving the conduct of unlisted public companies (UPCs) and entities offering Cash Trust products.
The regulator said in most of these scams, the perpetrators used fake websites, social media pages and mule bank accounts to promote and carry out their illegal activities.
In many of these cases, the scammers had falsely lent credence and legitimacy to their illegal activity by misusing the name of agencies such as the SC, Bank Negara Malaysia, the Companies Commission of Malaysia, licensed intermediaries and images of local celebrities and religious leaders.
"In 2023, the use of social media platforms, particularly Facebook and Telegram, continued to be the primary mode for perpetrators to carry out their illegal activities,” it said.
It noted that the mode of payment adopted by these investment scams had also changed to e-wallet and cryptocurrency from mule bank accounts used previously.
"The SC also observed the evolution of the common job and love scams which now have elements of investment scams as well.
"In cognisance of the perpetrators’ evolving tactics, the SC continues to undertake ongoing monitoring and supervision to mitigate the risk of its regulated entities being potentially used as conduits for illicit activities,” the regulator said.
It would also continuously monitor emerging trends and investment scammers’ modus operandi to ensure that appropriate and timely intervention is taken.
The regulator also reported that it regularly receives complaints and enquiries on operators of unlicensed activities who may not necessarily be carrying out a scam.
While some of the unlicensed activities are carried out locally by Malaysians, there were also foreign entities conducting unlicensed activities in Malaysia, SC added.
"These foreign entities may be properly licensed or regulated by foreign regulators. However, they would still be breaching Malaysian laws if they carry out their activities in Malaysia, solicit Malaysian clients or have a local presence in Malaysia without the requisite license or registration from the SC," it said.
With many investors now at a greater risk of becoming victims of financial frauds and financial exploitation, the SC has conducted a behavioural analytics study to assess investors’ behaviour and attitude towards investment, challenges and capabilities in their investment journey and their vulnerability towards scams.
The study assisted the SC to better understand the profile of the vulnerable investor group and served as an important input when formulating the necessary interventions through targeted outreach programmes.
Based on the sampling, the results showed that 384 out of 1,302 or 30 per cent of the respondents were more susceptible to scams -- of which 59 per cent were male; 34 per cent were young adults aged 31 - 40 years; 44 per cent were from the B40 households; and 70 per cent held at least a diploma qualification.
SC said the study also showed that the vulnerable group relied on family and friends to make investment decisions rather than relying on their own judgment, experience and knowledge.
"They were also more persuaded to invest in a scheme following the influence of unlicensed and unqualified individuals. These findings imply an increased willingness by this group to be exposed to investment opportunities that include scams," it added.
Aside from taking actions based on complaints and enquiries received, the SC also has a dedicated unit to proactively monitor and detect online unlicensed activities and scams.
The SC has and will continue to proactively disrupt the activities of the scammers and operators of unlicensed activity.
"In this regard, the SC included the names of entities and individuals found to be carrying on scams or unlicensed activities on the SC’s Investor Alert List as soon as possible; in most cases, this is done within 48 hours of receipt of complaints.
"Additionally, the SC also, with the assistance from the Malaysian Communications and Multimedia Commission (MCMC), blocked websites that were found to be carrying out scams and unlicensed activities, and also collaborated with social media providers such as Meta Platforms Inc (Facebook), Google LLC and more to geo-block offending social media pages," it said.
As of Dec 31 2023, a total of 569 URLs (2022: 382 URLs) have been detected for potential breaches on offering unlicensed activities to Malaysians.
Of these, 51 per cent were from Telegram, 27 per cent were from Facebook, nine per cent from Instagram and 13 per cent from other sources such as websites, YouTube and TikTok, among others. - Bernama
