Source: PIAM, 5 August 2021

Vehicle Theft Reduction Council of Malaysia (VTREC) are warning the public on the rise of frauds and scams relating to the vehicle. The pandemic Covid-19 has resulted in large fortunes for some e-commerce companies, unfortunately so did automotive frauds and scams. Automotive frauds and scams have skyrocketed in the first half of 2021.

The internet and e-commerce have become one of the main tools for fraudsters and scammers since it has a large footprint in the number of bogus selling. The internet allowed modern-day scammers a new tool that not only widens their net of potential victims but makes it extremely easy to target a large number of potential victims at an extremely low cost for bogus selling. Malaysian has seen frauds and scams are on the rise in recent years, particularly the bogus selling of vehicles online which has becoming the latest headline. The losses related to e-commerce in 2020 were 5,847 cases with losses of RM41.3 million, meanwhile, 2019 recorded 3,513 cases with losses of RM9.0 million. The cases have increased by 40% and the value of losses increased even further by 78%. During the first half of this year alone from January to June, total cases recorded have amounted to 4,628 with losses reaching more than RM27.2 million according to Bukit Aman Commercial Crime Investigation (CCID) during a webinar organised by VTREC recently.

The unsolicited communications were done in a way to make it difficult for authority and enforcement to trace their tracks by using various platforms including e-commerce, Whatsapp, and social media platforms such as Facebook and Instagram. Total frauds and scams via Facebook from January to June 2021 were 1,512 cases with losses of RM9.5 million, Instagram recorded 892 cases with a loss of RM3.5 million, Mudah.my recorded 449 cases with losses of RM1.9 million and Whatsapp recorded 354 cases along with losses of 2.6 million, based on CCID statistics. Among all of the platforms apparently Mudah.my recorded the highest number of cases and the most prevalent platform with bogus selling. The authorities have proactively ramped up measures to protect the public, they will always find ways to track the fraudsters’ and scammers’ footprints including collaborating with various parties in order to stay ahead of these criminals.

VTREC Co-ordinator, Mas Tina Abdul Hamid said “Out of the cases, second-hand motorcars, motorcycles and commercial vehicles were the highest categories of goods affected by frauds and scams. In the latest auto frauds and scams operations, the motorcars are offered at a very cheap price well below market value, normally those motorcars are foreign-made. A VTREC assessment of the impact of Covid-19 on auto frauds and scams has shown a significant increase in the first six months of 2021. The record shows that from January until June 2021 there were 669 frauds and scams cases recorded on second-hand vehicles along with RM7.5 million losses, while the whole year of 2020 recorded 707 cases with losses of RM5.7 million. During the first half of the year 2021 alone (January to June inclusive), for reference, that is about the same record throughout the entire of 2020, referring to CCID records.”

“The key reason for the rise in the statistics is fraudsters and scammers were taking advantage of online purchasing amid pandemic Covid19. These involve among others, bogus selling of vehicles online and forgery of insurance claims. The criminal perpetrators may post fraudulent online advertisements using fake pictures selling stolen vehicles or cloned vehicles to buyers together with forged documentation including Total Loss registration cards. Cloning a vehicle is refers to the exact duplication of another vehicle that was legally registered with the Road Transport Department (JPJ). Vehicle cloning resulted in innocent people becoming victims of vehicle fraud since they might buy vehicles without knowing that the vehicles are cloned. In other cases, the fraudsters advertise vehicle for sale that are not, nor have ever been in their possession with discounted price or below market price. Once contact is established, they would ask and pressure the victims to transfer money to bank accounts they provided, which belonged to unknown individuals or companies, then the fraudsters or scammers went disappeared. In the end, the vehicle is not delivered and the buyer never able to recuperate their losses,” she said.

Mas Tina highlighted that if a vehicle, offered for sale by any individual which looks like an offer of too good to be true, take your time to inspect the vehicle, check the company background, and ask question BEFORE purchasing it. Watch out for vehicle reselling fraudsters and scammers, the modus operandi used by them was to offer at well below ordinary price vehicles by claiming that the vehicles were from Singapore or Thailand.

“Despite the significant reduction in offline business transactions during MCO and its extended duration, frauds, and scams activities resulted in the higher record through online than offline. If current trends continue, the country will see a big spike in auto fraud and scams cases, while Malaysian could lose much more to auto frauds and scams this year than in 2020. We want to raise awareness of these frauds and scams to reduce the number of people who may be vulnerable to them. At the same time, VTREC intensifies its collaboration efforts with various stakeholders to reduce the rate of vehicle theft in the country,” concluded the VTREC Co-ordinator.

Auto frauds and scams not just happening online but they happened in various forms. It can be anything from lying about vehicle whereabout to exaggerating an accident to outright situations. There are cases whereby the vehicle owner steals his own vehicle and sell it, smuggling own vehicle to neighbouring countries and leave or sell it or the owner disposes or destroys the vehicle or burning it or hiding it or dumping it somewhere or striping it for spare parts and then claiming it was stolen as fraudulent insurance claims. There are also cases such as criminals steal vehicle for illegal used spare parts and selling them to corrupt middlemen. These middlemen mark up the stolen parts and sell them to dishonest workshops who pay below market rates for these stolen parts but bill vehicle owners or insurers for full price of new parts.

Other cases includes fraudulence in value of claims, like claiming shabby windscreen with a perfect fine quality or when the claimants over reporting of their accident vehicle by purposely overstating the accident damages or dishonest workshops involves in exaggerating certain aspects of an otherwise legitimate claims for example inflate of spare parts value or include illegal spare part as mentioned which normally substandard quality or old substandard spare part of a new claim. The insurers paying good money for the original part but the dishonest workshop replaces the damaged spare parts with illegal spare parts and substandard quality causing insurers to lose money and putting motorists at risk in the country when a counterfeit spare part is used.

VTREC advised public to check by utilising CCID’s Semak Mule application at website http://ccid.rmp.gov.my/semakmule/ to check whether the bank account given by buyer is used by fraudster or scammers. Those looking to buy a used vehicle need to be vigilant and make effort to keep records of your conversation, details of the seller and payment transaction as evidence to determine. Also, where the vehicle came from, its original owners, inspect the vehicle properly, and do fingerprint verification whereby buyer and seller must provide their thumbprint in order to exchange ownership. Always deal face-to-face, avoid sellers who refuse to meet in person or who refuse to allow the buyer to physically inspect the vehicle before the purchase. If you believe you have been a victim of this frauds or scams, please lodge a police report.