Recently, there is an influx of scam and fraud cases being shared around social media. The amount involved is also not small – up to tens and hundreds of thousand ringgit! The lack of enforcements on cybersecurity in our country has encouraged these scammers and fraudsters to multiply their cyberattacks, especially since they have been profiting so much these days. Previously, their modus operandi relied on tricking people into giving them banking passwords and TAC numbers. Nowadays, somehow, they can by-pass all these security measures without our knowledge and take our money in stealth, repeatedly. What’s worse, upon finding out that our money has been siphoned out, even after lodging police reports and contacting our bank, it is rare to hear of victims recovering their money. All this is due to the slyness of these perpetrators in going through the loopholes of our banking system.
Who wouldn’t be devastated when they find out that their hard-earned money is gone just like that, especially since we’ve all had this notion that our money in the bank is safe from any dirty hands. Of course, we expect the authorities to do more in terms of enforcements. But in the meantime, there are things that we can do to prevent ourselves from falling victims to these crimes.
Put your money in an investment account, not savings account
Use your savings account in the bank just to run errands and sustain your livelihood for the month. If you have a large sum of money in the bank that’s meant for emergencies, it’s better to have them in an investment account like Amanah Saham Nasional Berhad (ASNB) and Tabung Haji (TH). These investment accounts are very liquid and very accessible. Transferring money into them is pretty much like transferring money to other bank accounts, transactions can be done through our internet banking portal and app.
Advantages of putting your money in an investment account instead of savings:
If you unfortunately fall victim to a scam, the maximum amount of money that they can steal from your bank account is the amount you have allocated for the month, which is probably a few hundreds or thousands. The rest of your savings in the investment account are safe, and you can always pull money from there as a back-up.
Although transferring money into an investment account is easy, transferring out is a bit harder. So even if these cybercriminals want to take your money from that account, it requires more steps, making the process more difficult for them. Plus, it gives you extra time to think about the need to withdraw that money. This will eventually make you more disciplined in your spending too.
Money placed in an investment account gives you income in the form of dividends and/or interests. For example, monies in ASNB and TH can get you a return of 3-5% per annum, while monies in your savings account will only give you around 0.25%.
With the inflation rate of our country, over the years, monies that we save in the bank will only depreciate. So, keeping our money in an investment account will not only safeguard ourselves from scammers and fraudsters, but also safeguard ourselves from inflation – which is a silent thief of our money.
Use credit cards for online and cashless transactions, not debit card
The main difference in credit card vs debit card is that the money spent is not cash, but rather a credit. What does this mean? When we use our debit card to make purchases, the card acts as a medium for us to transfer the cash in our bank account into the account of others. Therefore, whenever there’s an unauthorized transaction via our debit card, the transaction involves hard cash i.e. real money. It is actually very hard for the bank to refund that money unless they have received that same amount of money elsewhere.
On the contrary, purchases made using credit card is just an on-paper credit transaction, which essentially doesn’t involve real money. Therefore, whenever there’s a fraudulent transaction happening on a credit card purchase, the bank can easily reverse the transaction on our card statement.
It’s interesting to see how physically, these two cards are similar, but because their underlying principle is different, it becomes the determining point of whether the loss from an unauthorized transaction can be recouped back or not.
Set a low daily limit for the transactions from your bank account
Placing a high limit, e.g. RM10,000, on your daily banking transactions allow for large sums of money to be siphoned out of your account easily. To be fair, most of us don’t know what’s our banking limit because it has been set at default by our banks. But, we can set it manually ourselves. Best practice is to set it to an amount that we feel is reasonable for our daily use, which is probably a few hundred or at most RM1000. If we ever have the need to make a big transaction, we can always adjust it to a suitable amount but for normal days, it’s best to leave the default at a minimum. This is so that even if someone were to withdraw money from your account, the maximum that they can take at a time is your daily limit. If they want more, they must do it another day, multiple times. This makes it hard for them and make it easier for you to trace.
Monitor your transactions every couple of days
The easiest way for us to detect a fraudulent transaction is by seeing the actual transaction appearing on our statement. Make it a habit to regularly scroll through your banking app to see whether there’s anything that’s out of the ordinary. While this is a good habit in monitoring your spending, it can also help in early detection and taking swift action whenever an unauthorized transaction has happened. Cybercrimes often go undetected due to our negligence and couldn’t-care-less attitude. These people thrive in a pool of people with low awareness. If we hardly ever look into our statements, they can happily steal our money bit by bit, until there’s nothing left.
It goes without saying that as our lives and spending have become more digital, regulatory enforcements on cybersecurity need to tighten. But while we wait for the authorities to act their part, it is best for us to take our own initiatives to ensure we don’t fall victims to these criminals that easily.
Sofina Johari is a Shariah RFP and a licensed financial planner with UOB Kay Hian Wealth Advisors.