I. What is online scamming and how does one get scammed?
Online scamming is a fraudulent scheme that takes money or any other goods away from an unsuspecting person through the Internet. According to a survey conducted by Telenor Group, 46% of Malaysians have been a victim of online scamming compared to other countries like Thailand, India and Singapore.
There are two ways a person may be exposed to online scamming:
1. Individuals are duped into giving their personal information, and that information is used against them. For instance, individuals may be engaging in surveys or transactions requiring disclosure of private information such as email address, phone number, accommodation and sometimes bank details.
2. Individuals may only realise that they were cheated after the completion of the online transaction. For example, online buyers are often attracted to promotions and price slashes to enter into an online transaction with the sellers, then they found out the sellers were actually deceiving them only when the parcels they ordered did not arrive at all.
The followings are the most common forms of scamming that just never get old;
1. The Nigerian Royalty scam: emails from Nigerian persons or persons of any other nationalities claiming to be royalty or very wealthy and in need of assistance to help them get their inheritance out of the country so that they can make a substantial donation to a good church, cancer treatment cost or some other worthy cause.
2. Phishing scams: emails claiming that your bank account or social media account is under threat and requires urgent verification that involves disclosure of your private information and credentials.
3. Guaranteed acceptance for credit cards and loans: emails or websites offering a guaranteed acceptance for credit card and loan provided that you pay a certain amount of fees.
4. Lottery scam: email claiming that you have won a huge amount of money that requires you to provide details of your bank account or pay certain amount of fees to collect your fortune.
5. Economic scam: scammers promising easy ways to obtain jobs, and easy money-making process online in exchange for your personal information and a certain amount of service fees.
6. Online dating scam: unpredictable event in which your online romantic partner that you may or may not have met requires some amount of money from you.
In Malaysia, one of the many prevalent online scamming schemes is through online sales. Although Malaysia has seen a rapid rise in certified and trusted online marketplace operators like Lazada and Zalora, there is also a significant rise in independent online sellers that flood the market. These online business suppliers usually have user-friendly interfaces and have great advertising which succeeds in enticing consumers to buy their products. Even if a consumer is well informed, it is still difficult to find the distinction between an authentic and a fake seller. In some cases, at trusted online marketplace operators, like Mudah.my, buyers can also be scammed.
II. What do I do to save myself when I am being scammed?
Are you worried that your Black Friday and Cyber Monday purchase items have not arrived and the sellers are no longer reachable, or that you got your parcel, but it is definitely not what you have ordered? You may be a victim of online scamming and you should undertake several actions.
First, in the event that the seller is missing in action, you are advised to lodge a police report and then a report to the relevant enforcement agency which is the Cyber Security Malaysia. Make sure that you keep all the records of documentations during the correspondence and the execution of the transaction. This is vital for enforcement purposes. If your problem involves hacking (which is possible given that you provided the seller with your personal details), you may also file a report to the Malaysia Computer Emergency Response Team through their Cyber999 Help Centre. The report can be made through the online form available on the website, email or SMS. Make sure that you have the following information; source of attack, destination of attack, email header, log files, and time of attack.
Next, in some serious matters, where immediate action is required or where you have already exhausted other options and the issue remains unresolved, you may resort to legal recourse. The fraudster may be sued for breach of contract under Section 76 of the Contract Act 1950.
When you enter into an online transaction, you are entering into a contract. Section 10 of the Contract Act 1950 provides that an agreement is a contract if it is made by parties competent to contract with their free consent along with lawful consideration (the object of the contract which is the thing that you are buying) and with a lawful object, and are not expressly declared to be void.
Upon discharging your burden in the contract, meaning when you have made the payment, and the seller did not fulfil his or her duty to provide you with the purchased item, or provides you with an item that is not agreed on in the contract, then it is a breach of contract.
Most often than not, in the latter case which is commonly known as a type of misrepresentation, you have the option to rescind a contract which means you get to put an end to the contract, or continue the contract.
Your right to rescind is laid down in Section 34(1) of the Specific Relief Act 1950. If you were to rescind a contract, the implication is that you have to return the item and the seller has to return your money- it is as if the contract has never taken place before.
If you choose to continue the contract, you may obtain relief in the form of damages if you suffer a certain amount loss, or specific performance whereby the seller has to perform the contract and give you the item that you bought.
III. My problem is not that serious and I cannot afford a lawyer.
It is important to note that legal action incurs legal fees. Therefore, if your problem is less complex (no missing seller but only persistent seller who scammed you into buying defective or fake goods), then you may take this dispute to the Magistrate’s Court through the small claim procedure in which you do not even need a lawyer.
Small claim procedure is standardised and meant to be layperson-friendly. Firstly, you may fill in the form with all the necessary details in four copies and state when, how and why the claim has arisen. You do not have to write a long essay- keep it succinct and precise. Next, you may submit the form to the registry of the Magistrate’s Court and pay a filing fee of RM10. Lastly, the court will inform you and the seller (now, the defendant) of the hearing date.
During the hearing, both sides shall present the arguments and evidences to support their case. No representation by a lawyer is allowed, but obtaining prior legal advice is not prohibited. The magistrate may award you the whole claim or part of it if you win the case. You can also claim for costs not exceeding RM100.
IV. Sun Tzu; Know your enemy (or the online dealer, in your case)
In order to have a safe online business transaction, it is wise to find out if the dealer or the seller is abiding the law. Are they doing enough to gain your confidence? The Consumer Protection (Electric Trade Transactions) Regulations 2012 is your guide as it provides the rules that every online seller needs to comply with.
First, under Section 3, all online sellers are required to disclose information regarding their business. In essence, on the part of sellers, they are required to disclose relevant information such as the name of the business or the company, e-mail address, telephone number, or the address of the business owner so the consumer can recognise the seller during the dealings.
Second, it is the seller’s part to describe the main characteristics of the goods and services so the potential buyers would not be deceived by merely the name or the photos of the product. For instance, it is not sufficient for sellers to mention that an iPhone is on sale without the necessary details such as the model of iPhone, the memory capacity and the condition of the iPhone itself.
Thirdly, sellers need to provide the full price of the products or services. The price should include transportation costs and taxes which are relevant. The consumer should pay the price which was listed by the seller and any subsequent increase in price shall make the seller liable under the law.
Finally, before posting an item for sale, sellers should include the method of payment, the terms and conditions of the sale, and the estimated time of the goods or services to be delivered the buyers. By doing so, sellers can be seen to be serious in business and the consumers will be more willing to purchase from them as they feel safer and more secured in the transaction. With the abundance of information, this provides consumers with the luxury of knowing who they are dealing with and where they can find them. To give an example, at Mudah.my, when sellers would like to make a deal online, they are required to create an account by using either Facebook or their e-mail before utilising the platform. The marketing platform also encourages the sellers to disclose their personal information in order to increase their chances of getting their goods sold. The regulation is beneficiary as it increases the confidence of the consumers during the dealings when they knew that the sellers are genuine in doing business with them.
V. What do I do to protect myself from being scammed?
The Bank Negara of Malaysia has provided some tips for the public to protect themselves from being roped into online scamming schemes. One of them is the golden rule of “if it is too good to be true, it is probably a lie”. You must also deal only with licensed financial institutions, or authorised dealers. If you were to go for an investment, be sceptical of any investment opportunity that is not in writing. You are also encouraged to do a little bit more of research on the identity of the dealers. These are the important steps that you should take before the transaction.
If you are confident to enter into a financial transaction, always keep copies of all the transactions and communications. Be wary of any unusual payment requests. Scammers tend to ask you to use unusual payment methods such as virtual currency like Bitcoins. Think twice before using virtual currencies as they do not have the same protections as other transaction methods- which means you cannot get your money back once you send it.
To avoid other general form of scamming, make sure you secure your mobile devices, computers, and passwords by using password protection and updating security software. Protect your Wi-Fi network with a password, and do not use Wi-Fi hotspot to access online banking services or any other activities that require you to provide your personal information.
Online transactions is the future and it is inevitable. Unfortunately, what is becoming an important part of our daily transaction reeks danger as online scamming is also prevalent in Malaysia. It is a given when the market grows substantially, a group of people may attempt to gain an unfair advantage. Fortunately for us, the Consumer Protection (Electronic Trade Transactions) Regulations 2012 exists to aid the government to track the sellers and prevent scams from taking place. Since we have the law ready to be enforced, consumers must be informed of their rights so they would not suffer unnecessary loss. Hence, it is important for the consumers to know the application of the law and the avenue to seek redress to ensure a more enjoyable online experience.
Written by Danesh Ram Aggarwal and Adam Huang. Edited by Lily Sabreena and Hanan Khaleeda
“Online Scamming: What is a Scam?”, April 2017, Computer Hope, 1 November 2017<https://www.computerhope.com/jargon/s/scam.htm>
“Asia’s Top Internet Scams and How to Stay Safe", March 2016, Telenor Group, 1 November 2017 <https://www.telenor.com/asias-top-internet-scams-and-how-to-stay-safe/>
Camoens A., “A man pays whopping RM50,000 for non-existent pet online", August 2016, The Star Online, 2 November 2017 <https://www.thestar.com.my/news/nation/2016/08/27/conned-by-bull-about-dog-man-pays-a-whopping-rm50000-for-nonexistent-pet-online/>
Order 93, rule 3(2), rule 5(1)
Order 93, rule 5(1)
Order 93, rule 15
“Avoid Becoming a Victim”, Bank Negara Malaysia, 4 December 2017 <https://www.bnm.gov.my/microsites/fraudalert/02_avoid.htm>
“Protect Yourself from Scams”, Scamwatch AU, 4 December 2017<https://www.scamwatch.gov.au/get-help/protect-yourself-from-scams>
Refer footnote 8 above