1.
0 Introduction
Online fraud is one of the hugest concerns of the modern world; it affects millions of
people all over the world. As more people do online shopping, use social media sites,
and depend on digital banking, the internet brings convenience but also new dangers:
scammers who will lure one into sharing personal information like credit card details or
passwords. They may appear as hoaxes in emails, websites, or even identity theft. The
more advanced technology becomes, the more the scammers seem to find new ways to
trick people, which calls for awareness and alertness on the part of everybody (Smith,
2020).
Scammers usually use tricks that appeal to emotions and raise urgency. They will
impersonate a well-established organization, or they may develop an authentic-looking
webpage, just to convince people into giving out sensitive information. Professional as
well as high-end internet users also get victimized without their knowledge. Jones, 2021
states that fraudsters bully the victim with urgent messages or with time-limited offers,
and victims tend to make quick actions without much afterthought. This case study will
determine how a certain group of individuals was deceived into releasing their private
data through a fictitious e-store.
The case study discussed a scam where a counterfeit website indicated the business
operation of selling discounted electronics. The website seemed so real to the victims
that they shared even their credit card and personal information. Jones (2021) explains
that scams like these rely on trust and urgency to fool people. By studying this case, we
aim to understand the methods scammers use and learn how to avoid them in the future.
As Brown (2022) points out, recognizing the warning signs of a scam early can help
protect people from losing money and feeling upset.
Online fraud not only causes financial loss but also leaves the victims feeling ashamed,
annoyed, and less trusting of online sites. Research by Miller (2019) indicates that such
emotional impacts can be even more destructive than the financial losses. Victims may
feel anxious or afraid to shop online again after falling for scams. This case study
indicates that a group of people felt violated and stressed after being scammed; hence,
the importance of teaching people how to spot and avoid scams.
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This research has put a highlight on the growth in the number of online scams and the
effects on victims. By understanding how scammers operate, we can find better ways
to prevent these scams and protect people. Educating both consumers and businesses
about online risks is crucial in creating a safer digital environment. Smith (2020).
2.0 The Issues of Online Scammer
According to Nur Syahidah (2020), there are several cases recorded from the research
in Malaysia about online scammers, namely 1001 cases of Macau scam, 2500 cases in
online trading, 41 cases of love scam, 1582 cases of non-existent loans, and 91 cases of
scam in short message services, as well as 9 complaints about scams in cheap Langkawi
travel packages as shown in Table 1.5 studied by Zulkifli. (2021). Not only that, 22
Malaysian citizens and 830 individuals have been detained as investigated, during the
raid, the Malaysian police successfully arrested 22 Malaysian citizens including four
women aged between 18 and 27 years. During the raid, the Malaysian police
successfully seized various equipment used for online scammer activities, including 34
mobile phones, laptops, and cars. Additionally, 830 individuals were detained because
they were believed to be involved as "money mules," which means individuals who
hand over their Automated Teller Machine (ATM) cards and PIN numbers to others,
and these accounts were used for known criminal activities, namely scams. In this
regard, online trade crimes are the highest cases so far according to a study in Malaysia.
According to the study, online trade crimes recorded the highest number of online
scammer cases, totalling 2,500 cases, including losses amounting to RM17 million.
According to reports and studies by the authorities involved in addressing the issue of
online scammer crimes, during the Movement Control Order period, known as (PKP),
due to the outbreak of Covid-19 from March 18, 2021, to August 4, 2021, scammer
crimes in trade recorded the highest number of cases in Malaysia.
There are also reports related to fraud in travel packages to Langkawi in 2021, taking
advantage of the Malaysian government's announcement allowing the tourism sector to
operate. This case was revealed by the Kedah Association known as (CAKE) and has
received nine complaints involving scams of cheap travel packages to Langkawi, taking
advantage of the Langkawi Travel Bubble Pilot Program in 2021 after the tourism sector
was allowed to operate by the government. However, the cases of tourism scammers
did occur in 2021 (Aziz, Salim, 2021). Recently, in 2024, there have been scams
involving travel packages to Korea. The Royal Malaysia Police (PDRM) have
confirmed receiving two complaints from victims of a travel package scam to South
Korea, which was perpetrated by an influencer on social media platforms such as
Instagram and TikTok. The Director of the Criminal Investigation Department (JSJK)
Bukit Aman, Datuk Seri Ramli Mohamed Yusof, stated that according to the reports
made by the victims of the travel package scam, the estimated losses amount to nearly
half a million. He said the fraud case went viral on social media when an influencer on
Instagram and TikTok known as 'Kim Seri' or Kimseri_Eina was accused of committing
a travel package fraud to South Korea. In this case, the JSJK of the Royal Malaysia
Police (PDRM) has received 24 complaint reports from the victims of the fraud case,
with a total loss amounting to RM454,450, and it is being investigated under Section
420 of the Penal Code. (Ayub, 2024).
In addition, cases of scams among working women are also not exempt from one of the
high crime cases in Malaysia known as "love scams." This scam involves African
nationals and has caused millions of Malaysian Ringgit in losses. The losses suffered
by victims of the "love scam" amounted to RM40.9 million in 2012 and increased in
the following years to RM80.3 million in 2013, RM816 million in 2014, and RM1.09
billion in 2015, as studied and reported by the Commercial Crime Investigation
Department (JSJK) and the Royal Malaysia Police (PDRM) Bukit Aman. The crime
continued to occur and increased in 2016, involving 407 victims with losses amounting
to RM19.2 million within a period of 70 days. Cases of "love scam" crimes have been
reported to occur more frequently in Selangor and Kuala Lumpur. As is happening
nowadays, the "love scam" crime occurs and begins because victims display their
profiles on social media such as profile pictures, educational status, employment status,
and also share and showcase their happiness and luxury on social media without limits.
This crime also stems from victims starting cyber love relationships, which are only
connected through social media, without knowing the background and personality of
someone before entering into a relationship. This happens due to the sophistication of
technology and the increasing speed of the Internet network worldwide, which
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encourages working women and even school teenagers to form relationships using
certain applications like "litmatch" and many others. This method has also become a
trend worldwide, including in Malaysia, for finding partners online, which has led to
the occurrence of "love scam" crimes (Sinar Harian, 8 April 2013).
3.0 The Factor of Online Scammer
Online scammer or online fraud has become a hot issue lately due to the increasing and
advancing technology that is becoming more widespread and sophisticated. This online
scam uses various methods or tactics to find someone's weaknesses to make them a
victim of the scam. This online scam has a negative impact on individuals and
organizations, which can lead to economic problems and other issues. There are various
factors that cause individuals or organizations to fall victim to this fraud.
One of the factors in online scammer is the main psychological factor often exploited
by online scammers, namely trust tendency. According to Zhang and Ye (2022), trust
tendency is often associated with an increased risk of fraud because people too readily
believe news or information without checking it first. Most older people are more likely
to be deceived because they are too trusting. For example, impersonating a trusted entity
such as a bank to ask users to update their account information, which is more
commonly known as phishing. Trust tendency is a psychological weakness that refers
to the inherent human trait of accepting and believing information without investigating
it first. Therefore, each individual should first investigate the source of information
before making any decisions to avoid online fraud.
Besides that, impulsiveness is also a common factor in online fraud. This impulsiveness
is the tendency to act without considering the risks that will arise from the actions taken.
Based on Zhang and Ye (2022), impulsivity indicates low self-control where individuals
enjoy immediate benefits without considering the long-term consequences and are
insensitive to the intentions of others. In the context of online scams, scammers exploit
victims to make quick decisions without considering the consequences, such as offering
investment opportunities with promises of large profits in a short time. Victims who
need money in a short period will be interested in this investment offer because they
want to gain profits quickly without considering the risks that could lead to losses and
economic problems. Therefore, individuals should think carefully first and consider the
risks that may occur in the future to avoid falling victim to this online scam themselves
or their close family members.
In addition, the factor that causes online fraud to occur is due to unstable financial
conditions. This is said because people who are struggling financially are more prone
to become victims of internet scams since they are more readily seduced by offers from
con artists, such as employment chances or programs to make quick money. In
conclusion, people become victims of internet scams, which creates instability in their
lives and wallets, as a result of the increasingly difficult economic conditions and a lack
of employment prospects.
In conclusion, internet scams are become more common in our nation, and many victims
have lost money or property as a result of falling for these scammers' tricks. In order to
prevent internet scams, all parties involved must work together to solve this issue by
launching awareness campaigns about them and exercising caution while evaluating the
information they have already collected before making any decisions. People may
guarantee a calm and prosperous everyday life and preserve a more stable economy in
this way.
4.0 Types of Online Scammer
4.1 Phishing
This is among the oldest types of fraud. The technique of making a phony website that
closely resembles the one it is imitating is known as phishing. Usually, this is a website
for a bank or credit card. An email with a cleverly disguised link is sent to the target
user, making them think the communication is from the actual bank or credit card
business. Upon clicking on the link, the user is taken to the phony website rather than
the actual one. After the unwary victim inputs their login information onto the website,
it is sent to the scammer's harvesting page, which is typically a text file that contains a
script designed to gather the login information.
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The user is automatically taken back to the genuine website after entering their login
credentials, with no indication that the phony webpage has obtained their information.
This is how a phishing scam operates fundamentally. It has become increasingly
complicated over time, and the user is essentially left in the dark about the entire
swindle. The fraudster can quickly change the user's account and transfer the funds to
his own account once he gets the user's login information. All of this takes place in just
a few minutes, and before the user realizes it, all of their life savings may vanish into
thin air.
Figure 1: An Example of a phishing page, mimicking the original bank webpage
A beginner user unintentionally falls into the trap because emails like the one displayed
are difficult to identify. Even if bank websites advise their users to disregard these
emails, many people nevertheless click on the phishing link because they are afraid of
the threats they contain. Worldwide, millions of dollars have been lost as a result of this
one hoax alone.
4.2 Video Scams
The next generation of the web is all about videos, whereas Web 2.0 was all about blogs
and news portals. YouTube's success is a striking illustration of how internet users have
fully embraced videos as a source of news and information. Spammers took notice of
the growing popularity of videos and exploited it to develop a brand-new method of
defrauding people of their money. But this fraud is a little trickier than it looks.
Video scamming is the practice of deceiving a person into watching a malicious video.
The user is prompted to download a codec to view the video after attempting to do so.
The user downloads the codec because they are determined to watch the video no matter
what, and the title of the video is usually so enticing that it is difficult to resist. But the
codec is really a piece of malware that infiltrates the user's machine and secretly records
every action. This malware may even be a key logger, which logs every keystroke a
user makes.
Figure 2: Example of Fake Video Online Scammer
The typical internet user finds it difficult to resist watching videos like the one above,
and they do receive a lot of clicks. [4] Similar to the aforementioned example,
Facebook, the biggest social networking site in the world, is currently the platform for
many video frauds. These video scams are successful because of Facebook's wide user
base, which consists of each user's circle of friends, each of whom has their own circles.
Even if the purpose of these films isn't always clear, consumers start to realize that after
installing the codec that the video requires, their computers start acting abnormally.
4.3 Identity Theft
One type of scam that coexists with phishing is identity theft. Scammers are constantly
pursuing their victims' personal information, which they then utilize to assume their
identities. When it comes to online personas, this is accurate. A careless Internet user
may lose all of his online identity, including user accounts, bank accounts, and any other
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online accounts he may have. Online identity thefts of this kind are not unusual. Over
the past ten years, they have been occurring often, and only recently have they
somewhat calmed down. Identity theft typically entails obtaining all of the target user's
personal data using a phishing website or other comparable method. The fraudster
exploits the user's information for his own benefit once the user has unwittingly
provided it, thus stealing the user's identity entirely. Contacting a cybercrime specialist
is the only way to handle such issues.
4.4 Scareware
Scareware is a relatively new scam kind that has just lately begun to bother users. But
in a short period of time, it has developed into a significant internet hoax that requires
careful attention. As the name suggests, scareware is software designed to frighten
people into spending money. Usually, this is phony anti-virus software that frightens
customers by displaying fictitious computer infection reports. [7] Through an infected
website or other source, the user installs the program on his computer without realizing
it. After installation, the program conceals itself from any legitimate anti-virus software
on the computer and locks the system registry. However, it seizes total control of the
machine and prevents the user from removing it. At the same time, it keeps presenting
the user with fictitious virus reports and requests that they buy a premium version of
the anti-virus program in order to get rid of the viruses. The frightened user typically
pays to have the viruses removed, but this usually just makes things worse because the
program still won't stop talking and the user still can't take back control of the machine.
Figure 3: An Example of Scareware Software
In numerous cases, people have lost their hard-earned money due to falling for
scareware techniques. Since the harm is usually extensive and any attempts to remove
the scareware using an anti-virus program would be pointless, scareware removal
typically entails reinstalling the operating system. This is how dangerous the scareware
malware is after it gets on the machine. It can only be avoided by preventing the
installation of any new program before verifying its authenticity.
5.0 Impacts of Online Scammer
5.1 Financial Loss
The most obvious and immediate consequence of online frauds is financial loss.
Fraudulent transactions, embezzlement, and fund diversion are common ways for
businesses to lose money. They also have to deal with indirect costs including the price
of court cases, victim compensation, and investments in more robust cyber security.
Such losses might affect public finances by trickling down to taxpayers for governments
and state-owned businesses.
For instance, the 1MDB Scandal occurred previously. According to the report,
1Malaysia Development Berhad (1MDB) had almost $4.5 billion stolen. Instead of
being used for bribery and luxury expenditures, these monies meant for national
development were embezzled. Malaysia was consequently left with more than $12
billion in debt, which put a heavy strain on taxpayers and resulted in a downgrading of
the nation's credit rating. Long-term economic repercussions of this included greater
borrowing prices for the government and less money for public projects (Azhar, 2024).
Another example is the Island Red Cafe Scam. Due to the promises of large returns,
many investors in this franchise went bankrupt after suffering large losses. Franchisees
and staff were left stranded without compensation or redress after the overall financial
loss surpassed RM1 million. Moreover, Surewin4u Gambling Scheme is another online
scammer enterprise. Millions were lost by victims, who included both individuals and
small enterprises from Singapore and Malaysia. The anticipated losses in Singapore
alone totaled 50 million SGD, depleting both personal funds and municipal economies.
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So obviously, online scams make the result in both direct losses, like fraud or
embezzlement, and indirect costs, such legal fees, victim compensation, and recovery
costs. The Malaysian government, for instance, is heavily indebted after 1MDB lost
$4.5 billion, and scams such as Island Red Cafe and Surewin4u stripped local
economies of their money and caused personal bankruptcies.
5.2 Reputational Damage
A company's reputation is essential to its success. A company's reputation can be
seriously harmed when it participates in or falls victim to a fraud. Reduced revenue,
strained relationships, and long-term challenges in reestablishing credibility can result
from losing the trust of clients, investors, and business partners. Reputation loss can
also undermine economic stability and national prestige for governments or businesses
with ties to the government.
For example, the 1MDB Scandal's fraudulent actions caused Malaysia to be known
throughout the world as a hub for financial mismanagement and corruption. Due to the
reputation harm, foreign companies and investors were reluctant to do business with
Malaysian firms, which deterred foreign direct investment (FDI) (Azhar, 2024).
Additionally, the public's scepticism of other franchise opportunities in Malaysia was
exacerbated by the revelation of fraudulent activities within Island Red Cafe, which hurt
the franchise industry overall and made it more difficult for legitimate franchises to
draw in potential investors.
Furthermore, the Surewin4u Gambling Scheme damaged Malaysia's reputation as a
global scam, especially in the fin tech and multi-level marketing (MLM) sectors.
Legitimate businesses found it more difficult to grow internationally as a result of the
hoax, which made overseas partners suspicious of Malaysian companies.
As a result, scams can therefore damage a company's credibility by undermining
confidence among partners, investors, and consumers. Malaysia's international standing
as a reliable financial center was damaged by the 1MDB scandal, while genuine
businesses were negatively impacted by Island Red Cafe and Surewin4u, which
undermined public trust in franchise and multilevel marketing chances.
5.3 Operational Disruption
The operations of a business might be seriously disrupted by online scams. Business
operations are frequently halted by scams involving ransomware, embezzlement, or
data breaches as organizations rush to repair their systems, restore stolen data, and limit
the harm. Customer service, project schedules, and general productivity are all impacted
by operational disruption, which frequently results in a chain reaction of losses.
For instance, in the 1MDB Scandal, major infrastructure and development projects in
Malaysia were delayed or canceled as a result of financial embezzlement. Lawsuits and
investigations, both local and foreign, further hampered the company's operations by
taking management's attention and resources away from its main goal (Azhar, 2024).
Furthermore, Island Red Cafe unexpectedly stopped operating after the hoax was
discovered. There was a great deal of uncertainty and chaos throughout the franchise
network as employees lost their jobs and franchisees were left without direction or
support.
Finally, employees in the Surewin4u Gambling Scheme lost their jobs as a result of the
company's closure, which also caused disruptions for partner companies that depended
on its operations. The affected industries experienced further volatility because of the
fraud victims' protracted uncertainty about getting their money back.
In conclusion, scams compel businesses to suspend operations to repair losses, taking
resources away from their primary duties. For example, legal disputes caused 1MDB's
development projects to be delayed, franchisees were upset by Island Red Cafe's abrupt
collapse, and staff and partners were left in a state of chaos following Surewin4u's
closure.
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6.0 Solution of Online Scammer
6.1 SafeBuy Online: Addressing the Risks of Online Fraud
The threat posed by internet scammers to both persons and organizations is not a recent
occurrence; Safe Buy Online is one such example. A mid-sized e-commerce business
was targeted by scammers who created fake websites to steal from customers. To tackle
this challenge, safe purchase created a strategy that traveled on many ships. The Secure
Payment Protocol (SSL) encryption was put in place at the company, AI-driven fraud
detection systems were deployed, and monthly security updates were launched to
reinforce the company against cyber-attacks. It also launched a customer awareness
campaign to educate customers on how to recognize phishing emails, shady links, and
fake websites. SafeBuy used real-time warnings and emphasized the use of authorized
communication channels to warn customers against visiting fraudulent websites.
Additionally, SafeBuy recommended that users enable two-factor authentication (2FA)
to enhance security and included a verified seller label to assist consumers in
distinguishing reliable sellers from scammers. The company also worked with law
enforcement and financial institutions to expose fake websites, halt fraudulent
transactions, and investigate scam operations. The customer service overhaul included
a recovery guide to help clients secure their accounts and monitor their credit, a
dedicated 24/7 helpline, and partial reimbursement rules for fraud victims.
In order to identify weaknesses, SafeBuy also employed proactive strategies, such as
engaging ethical hackers, conducting frequent security audits, and subscribing to threat
intelligence services. These steps resulted in a 70% reduction in fraud incidents and a
significant improvement in customer trust, as seen by higher platform engagement and
positive remarks. This case study highlights how important it is to combine technology
defenses, customer education, and collaboration with authorities to successfully battle
online scams and advance a safer digital world.
7.0 Conclusion
To sum up, online scams in the modern-day digital world have gradually started posing
a threat to individuals and businesses. The given case study elaborates on how
scammers make use of different tricks, such as fake websites and phishing, in order to
access one's personal information or for the purchase of non-existent products. Victims
in this case were led to enter their credit card information in a fake online store, causing
them financial loss besides being traumatic. According to Taylor (2020), fraudsters use
pressure and urgency to make people act in a hurry without giving it a second thought,
so one should be very careful while shopping or sharing information online. The
aftermath of online scams can be long-lasting.
Victims not only lose money but also feel embarrassed, frustrated, and lose trust in
online platforms, as Miller (2019) explainsThis demonstrates the necessity for people
to comprehend the dangers and become more vigilant about scams. It's critical to take
precautions including verifying the legitimacy of websites, avoiding dubious emails,
and exercising caution when disclosing personal information because frauds are getting
more sophisticated (Brown, 2022). Stopping scams requires everyone to work together.
People should practice safe online habits, such as using secure payment options and
keeping personal information private. Businesses can also help by teaching their
customers about scams and making their websites more secure. Smith (2020)
recommends these actions and stronger cybersecurity to help protect people from online
fraud. As technology grows, so do the ways scammers will try to trick people. This
means it is more important than ever to stay informed and update security practices.
Taylor (2020) emphasizes that education and awareness are key to avoiding scams and
reducing their impact.
It follows that the fight against online fraud involves individuals, organizations, and the
government. The case study shows how detecting the warning signals of a scam and
taking simple precautions can avoid any fraud on the internet. If ever the internet is to
be made a safer place for everyone, we will have to work together to share our
knowledge, improve our security, and promote safer behavior online.
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