ISSUES

Combating Scam Syndicates in Malaysia and Southeast Asia

By Dr Beh May Ting (Programme Coordinator & Senior Analyst, History & Regional Studies Programme)   |   Posted on

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By Dr Beh May Ting (Programme Coordinator & Senior Analyst, History & Regional Studies Programme) | Posted on 19 March 2025

Executive Summary

  • Scams pose a major security and economic threat in Malaysia and the broader Southeast Asian region.
  • These activities range from online scams to organized transnational syndicates that exploit digital vulnerabilities and regulatory gaps.
  • Malaysia lost RM54.02 billion, or equivalent to 3% of the nation’s GDP to scams in 2024.
  • As ASEAN Chair, Malaysia is prioritizing the curbing of job scam syndicates operating across Southeast Asia.
  • Key policies to consider include strengthening cross-border cooperation, implementing robust legal frameworks, and leveraging technological innovations to combat scams effectively.

    • Introduction

    The rise of digital finance, e-commerce, and online transactions has created new opportunities for fraudsters. From investment scams and phishing schemes to job fraud and love scams, these illicit activities cause financial losses amounting to billions of Ringgit annually. Many scam operations in Southeast Asia involve sophisticated cross-border syndicates; this makes enforcement challenging.

    This paper examines the landscape of scams in Malaysia, focusing on the most commonly reported ones, analyzes the regional scam ecosystem, and proposes policies to enhance prevention, enforcement, and public awareness. It emphasizes the need for cross-border cooperation, robust legal measures, and technological innovations in curbing the rising threat.

    The Landscape of Scams in Malaysia

    Scams continue to inflict severe financial and emotional distress in Malaysia, with the State of Scam Report 2024 revealing losses of RM54.02 billion (US$12.8 billion), equivalent to 3% of the nation’s GDP. Despite the staggering figures, 70% of victims did not report the scams, reflecting widespread skepticism toward the process. AI-driven scams such as deepfake videos and voice imitation are on the rise, with 25% of Malaysians unsure whether AI played a role in the scams they encountered.

    Additionally, 74% of respondents reported facing scams monthly, primarily through phone calls, messaging apps, and social media (Zainul, 2024). The average financial loss per victim stands at USD2,726, with only 2% managing to recover their funds. Investment scams remain the most prevalent (23%), followed by identity theft (21%) and shopping scams (20%) (Shahrizal, 2024).

    Malaysia also saw a sharp rise in scam calls, reaching US$2.98 million last year; an 82.81% increase from US$1.63 million in 2023, according to the 2024 Whoscall Annual Report (Fam, 2025).

    In 2023, online crime cases reported to the Royal Malaysia Police surged by 35.5%, totaling 34,532 cases compared to 25,479 the previous year. E-commerce crimes accounted for the largest share at 33.2%, followed by telecommunications fraud (30.0%), non-existent investments (15.6%), fraudulent loans (12.3%), e-finance fraud (6.1%), and love scams (2.7%) (DOSM, 2024).

    Online Scams

    Online scams are evolving rapidly, using digital platforms to deceive users through phishing, fake e-commerce sites, and digital payment fraud. Phishing schemes trick victims into revealing sensitive information such as passwords and credit card details by impersonating trusted institutions via emails or fraudulent websites.

    According to Cyber Security Malaysia (CSM), these attacks are increasingly localized, often mimicking government initiatives, major e-commerce platforms, and financial institutions. A growing concern is “smishing” (SMS-based phishing), where scammers pose as banks, high courts, e-wallet providers, employment websites, and delivery services like J&T and Pos Malaysia to steal personal data (The Malaysian Reserve, 2025).

    In 2024 alone, the Royal Malaysia Police’s Commercial Crime Investigation Department recorded 35,368 scam cases, resulting in RM1.6 billion in financial losses—accounting for 84.5% of all commercial crimes reported during the year (Bernama, 2025a).

    Telekom Malaysia (TM) released an official statement warning customers about scam emails falsely informing them of cash prizes from a programme called “Bonus Hadiah Keluarga TM.” These emails attempt to deceive recipients into providing personal details to claim a non-existent reward. Likewise, the Employees Provident Fund (EPF) has been cautioning members about fraudulent messages impersonating authorities, falsely offering early EPF withdrawals.

    Fake e-commerce platforms attract victims with enticing deals which either fail to deliver goods or steal payment details. Digital payment fraud, including unauthorized transactions and account takeovers, targets users of banking apps and e-wallets. With scammers increasingly using AI-generated impersonations and other advanced tactics, it has become essential that public awareness, cybersecurity defenses, and regulatory enforcement are strengthened.

    Investment Scams

    Investment scams prey on individuals seeking high returns, using deceptive tactics like Ponzi schemes, fake cryptocurrency investments, and illegal money-lending. Ponzi schemes promise lucrative profits but rely on funds from new investors to pay earlier ones, eventually collapsing when recruitment slows. Fake cryptocurrency investments exploit the hype around digital assets, enticing victims with fraudulent platforms, pump-and-dump schemes, or non-existent tokens. Illegal money-lenders, often operating under the guise of quick loans, impose exorbitant interest rates and use intimidation tactics to trap borrowers in a cycle of debt.

    To avoid these scams, individuals should verify investment opportunities, be wary of unrealistic returns, and consult licensed financial authorities before committing funds. The Securities Commission Malaysia (SC) has identified social media platforms such as Facebook and messaging apps like Telegram as primary channels for scammers. A notable shift in 2023 saw fraudsters increasingly using e-wallets and cryptocurrency instead of traditional mule bank accounts (The Star, 2024a).

    By the third quarter of 2024 (3Q 2024), the SC had received 3,380 complaints and inquiries related to scams and unlicensed activities, marking a 28% rise from the previous year (The Star, 2024b). Investment scams in Malaysia are so prevalent that new cases continue to emerge frequently. At the time of writing, the incident most recently reported involved a medical officer who lost RM86,000 to a cryptocurrency scam (Bernama, 2025a).

    Love Scams

    Love scams have become a major concern in Malaysia, with fraudsters preying on victims’ emotions to manipulate them into transferring money. Scammers often create fake identities on dating apps, social media platforms, or messaging services, pretending to be wealthy professionals, military personnel, or foreigners seeking companionship. Once trust is established, they fabricate emergencies or investment opportunities to solicit funds.

    Among the noteworthy cases is a 2021 incident which involved a 63-year-old Malaysian widow who lost nearly RM3.9 million to a scammer she believed was a Korean businessman (Liew, 2022). Similarly, in one of the longest-running love scams reported, a 67-year-old woman lost more than RM2 million through 306 bank transfers into 50 different accounts over seven years to a scammer she met on Facebook, who posed as an American businessman working in medical equipment procurement in Singapore. Throughout their online “relationship,” they never met in person, and the scammer fabricated various emergencies to solicit funds from her. (SCMP, 2024).

    National Scam Response Center (NSRC)

    The National Scam Response Center (NSRC) is a vital initiative in Malaysia’s fight against financial scams;
    it provides a centralized and rapid response mechanism to detect, report, and mitigate fraudulent activities.
    Established as a collaborative effort between key agencies including the Royal Malaysia Police (PDRM),
    Bank Negara Malaysia (BNM), the Malaysian Communications and Multimedia Commission (MCMC), and financial institutions,
    the NSRC enhances coordination between law enforcement and the private sector. This inter-agency approach ensures
    a faster and more effective response to scams, thus reducing financial losses and increasing the chances of
    fund recovery (Prime Minister Department, 2024).

    One of the NSRC’s key functions involves its emergency response hotline (997), which allows
    victims to report scams in real-time (Teoh, 2022). This enables authorities to freeze fraudulent transactions,
    block scam-related bank accounts, and trace stolen funds before they are laundered or moved offshore. By providing
    immediate intervention, the NSRC minimizes the financial impact of scams and disrupts syndicate operations.

    The NSRC also plays a crucial role in public awareness and prevention efforts. It collects and analyzes scam data
    to identify emerging fraud trends, which helps in developing proactive measures, including scam alerts, financial
    literacy programs, and policy recommendations (Camoens, 2023).

    Scam Syndicates in Southeast Asia

    Job scams have emerged as a major global concern, often leading to human trafficking and forced labour. Scammers
    attract victims with fraudulent job offers, promising lucrative salaries and attractive benefits abroad. However,
    upon accepting these offers, victims are trafficked to scam centres in countries such as Cambodia, Myanmar, and Laos,
    where they are subjected to inhumane working conditions and constant threats of violence. Many are forced to engage in
    online scams, including cryptocurrency fraud and romance scams, under strict surveillance.

    Reports indicate that thousands, including Malaysians, have fallen victim to these syndicates. These syndicates thrive
    in countries with weak law enforcement, exploiting human trafficking as a recruitment strategy for their illicit operations.
    In response, governments and law enforcement agencies across Southeast Asia are intensifying efforts to dismantle these networks, rescue victims, and educate the public on deceptive job offers.

    As the 2025 ASEAN Chair, Malaysia is prioritizing efforts to combat job scam syndicates across Southeast Asia.
    ASEAN countries are enhancing cooperation through ASEANAPOL to tackle these syndicates, with previous
    discussions held in Labuan Bajo, Indonesia, and Vientiane, Laos. A recent example of regional collaboration is Myanmar
    handing over 320 foreign nationals, including Malaysians, who were victims of job scams. These individuals were transferred
    to Thailand’s National Referral Mechanism for identity verification before repatriation (The Star, 2025).

    In a separate case, The Ministry of Foreign Affairs (Wisma Putra) confirmed the rescue of 60 Malaysian nationals
    believed to be victims of a transnational job scam syndicate. The operation, carried out by Cambodian authorities on
    February 22, targeted illicit online scam compounds in Poipet, a region near the Cambodia-Thailand border.
    Following the rescue, the victims were transferred to an immigration detention centre in Siem Reap for identity verification
    and further processing (Bernama, 2025b).

    Malaysia has been actively enhancing its diplomatic and law enforcement strategies to combat the escalating issue of scam syndicates. In collaboration with international partners, Malaysia participated in Operation First Light 2024, a global initiative targeting online scammers. This operation, involving 61 countries, led to the arrest of approximately 3,950 suspects and the seizure of $257 million in illicit assets. The operation also facilitated the freezing of 6,745 bank accounts associated with fraudulent activities (INTERPOL, 2024). Through these concerted efforts, Malaysia aims to strengthen its position in leading both diplomatic and law enforcement initiatives to mitigate the growing problem of scam syndicates.

    Limitations in Existing Legal Frameworks

    One of the key challenges in combating scam syndicates is the inadequacy of existing legal frameworks which often struggle to keep pace with evolving cyber threats. Many countries rely on outdated cybercrime laws that do not fully address emerging digital fraud tactics, such as AI-powered scams, deepfake impersonations, and cryptocurrency-based money laundering. While laws like Malaysia’s Computer Crimes Act 1997 and the Personal Data Protection Act 2010 provide a foundation for cybersecurity enforcement, they lack provisions for tackling sophisticated online fraud and cross-border cybercrime networks.

    Furthermore, weak enforcement of anti-money laundering regulations hampers efforts to dismantle scam syndicates. Despite the presence of anti-money laundering laws, loopholes in financial oversight allow fraudsters to exploit offshore accounts, cryptocurrency transactions, and shell companies to launder illicit funds. The lack of real-time monitoring mechanisms and cooperation between financial institutions and law enforcement agencies makes it difficult to track and freeze scam-related assets before they are funneled out of the country.

    Another major limitation is the jurisdictional challenge posed by international scam networks. Many syndicates operate from countries with weak regulatory enforcement, which makes extradition and prosecution difficult. Scam operators based in Cambodia, Myanmar, and Laos, for example, often target victims across Southeast Asia while evading local law enforcement.
    Limited bilateral agreements and delays in cross-border legal cooperation hinder efforts to apprehend perpetrators and recover stolen funds. Addressing these challenges requires comprehensive legal reforms, stronger international cooperation, and enhanced regulatory mechanisms to close loopholes exploited by scam syndicates.

    Challenges in Enforcement

    A significant challenge is the prosecution of transnational scam syndicates which operate across multiple jurisdictions with varying levels of legal enforcement. Many scam hubs are based in countries with varying regulatory oversight, such as Cambodia, Myanmar, and Laos, making it difficult for Malaysian authorities to apprehend perpetrators or recover stolen assets. Limited extradition agreements and slow cross-border legal cooperation further complicate efforts to dismantle these networks. Even when scammers are caught, gaps in evidence gathering and the reliance on outdated cybercrime laws make it difficult to secure convictions.

    Additionally, enforcement agencies often lack advanced technological tools to effectively track and combat digital fraud. Scammers use sophisticated techniques such as end-to-end encrypted messaging, AI-generated deepfake identities, cryptocurrency laundering, and multi-layered proxy servers to evade detection. Without robust real-time surveillance systems, AI-powered fraud detection, and better forensic capabilities, law enforcement struggles to keep pace with evolving cyber threats. Addressing these challenges requires a more integrated enforcement strategy, stronger regional collaboration, and greater investment in next-generation cybersecurity technologies.

    Policy Recommendations

    To effectively address the rising threat of scam syndicates, a multi-pronged, data-driven approach is necessary, which combines legislative reforms, cross-border cooperation, technological advancements, financial regulations, and public awareness initiatives.

    1. Strengthening Legal Frameworks

    • Modernizing Cybercrime Laws

      Malaysia’s Computer Crimes Act 1997 and Communications and Multimedia Act 1998 are outdated; they lack provisions for AI scams, deepfake fraud, and crypto crimes. Challenges remain in integrating advanced detection systems and improving cross-border cooperation. To combat evolving threats, Malaysia must introduce stricter penalties and update legal frameworks for online fraud. Additionally, collaborating with IT specialists and cybersecurity experts is crucial in formulating tech-driven policies that address evolving digital threats and enhance enforcement capabilities.

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