The Malaysian Insight

SMALL business owners are falling prey to fraud, especially over purchases of non-existent gloves and masks, during the Covid-19 pandemic.

Victims have flooded the political parties with complaints of having been cheated of money at a time they can ill afford it.

Gloves and masks are in demand because of the pandemic and many businesses are trading in them because it is a quick and easy way to make a profit.

However, that has also left them vulnerable to fraud.

Federal Territories DAP public complaints bureau chief Yew Jia Haur said this was because many of the victims bought the goods though “middlemen and agents”.

“The agents will say they currently have no stock but promise that they will be getting the items soon,” he said.

He said these agents usually arrange for the money to be paid to overseas accounts.

After the payment is received, the agents clear out their offices and are seen no more, he said.

Sometimes, to gain the buyer’s trust, the agent will deliver the first order

“When the victim places a bigger order the second time around and pays a huge deposit as well, that’s when they flee with the money.”

His bureau has received complaints about losses ranging from RM300,000 to RM8 million.

“In the past year, we’ve received 13 complaints of fraud involving gloves and 20 involving masks,” Yew said.

Often, the victims are introduced to the agents by acquaintances, which connection gives them a veneer of legitimacy.

“Because of the pandemic and the poor economy, business owners are looking to profit any way they can, including by buying cheap and selling high. Fraudsters are taking advantage of this so traders should be more wary,” Yew added.

Another successful con is the offer of a non-existent loan. Swindlers posing as loan officers from a bank approach small and medium-sized enterprises with an offer to lend money.

Andy Lieng of the Selangor Gerakan public complaints bureau said such con artists typically advertise their services on social media.

“Many victims think they are legitimate bank officers and apply for the loans but instead of receiving the money are promised, they lose RM10,000 or RM20,000.

“These fraudsters will first say that you need to pay costs, insurance, and stamp duty. Business owners oblige because they want quick approval. To pay, they borrow from loan sharks. 

“And when the loan doesn’t materialise, the business owner has not only been cheated but now owes money to loan sharks as well,” Liang said.

The scammers tend to target small factory owners struggling to pay their overheads and their suppliers at the same time.

“These fraud cases have been occurring non-stop since last year . We’ve already received 30 to 50 complaints,” Liang said.

He reminded businesses to deal directly with the banks when it comes to matters like loan applications.

“You can get information first on social media but at the end of the day you need to personally meet and talk with the bank. 

“If they say they want to meet at a restaurant or coffee shop, generally speaking, these are conmen, do not fall prey to them,” he said.

Scams through phone calls are also becoming widespread, Liang added.

“A friend who was cheated of RM5,000 about a month ago said he received a call from someone claiming to be an old friend, who identified him by name, although he sounded a little strange.

“The friend said he sounded different because he was wearing a mask. The individual then asked for a RM10,000 loan to purchase some stock in order to sustain his business. My friend said no and that he could only lend him between RM3,000 to RM5,000 at most, and that the money had to be returned in three days,” he said.

After the money was transferred, the friend was no longer reachable. Lieng said his friend then went to the home of the person claiming to be his old friend, and discovered that he had been cheated.

“The real friend denied ever asking for a loan and had also stopped using the phone number for some time.”

On phone fraud, DAP’s Yew reminded the public that government departments all require appointments to be made online or through the phone.

“Fake enforcement officers from one agency or another would call the victim and tell him or her that they had been involved in a hit-and-run incident, or that there is some commercial dispute in the courts with a fine of RM10,000 to RM20,000 to be paid. The fraudster would say the accused was not called to court because of movement restrictions.

“They usually call around 3.30pm to 4pm, and then say the court needs to receive the fine before 5pm or the accused will have to spend time in jail and pay an even higher fine. Under pressure, the affected party usually would quickly deposit the money.”

Yew said at least 50 cases of phone fraud have been lodged with his bureau.

“When feeling pressured by such phone calls, discuss with someone you trust before making any deposits. Or even better, call the enforcement agency directly to check if there is actually a case against them.” – March 27, 2021.