LETTER | As a journalist, I have in recent months come across a growing number of cases involving individuals who have entered into troubling arrangements with entities presenting themselves as licensed money lenders on social media platforms, particularly Facebook.

In short, many were scammed!

Many of these operators claim to be registered with relevant government agencies, often displaying logos, certificates, or registration numbers to reinforce a sense of legitimacy.

At first glance, the presentation appears credible. But beneath that surface, investigators say, is a system designed to extract money through carefully staged interactions.

Illusion of legitimacy

According to police, the modus operandi follows a structured and highly persuasive pattern.

An initial “agent” typically makes contact through social media, presenting loan offers professionally and reassuringly.

Profiles are often curated to project trustworthiness, with polished images and identities that appear credible and relatable.

Once engagement is established, the prospective borrower is gradually introduced to a second individual, presented as a “headquarters” officer or loan approval authority.

This transition is deliberate. It creates the impression of a formal organisation with internal processes and layers of approval.

At this stage, the borrower is told the application is progressing smoothly, often described as “almost approved.”

What follows, however, is a sequence of payment requests that were never disclosed at the outset.

Escalation of fees

Borrowers are first asked to pay a processing fee, typically amounting to several hundred ringgit. Soon after, they are told an additional payment is required for insurance to protect the loan, often in the range of RM600 or more.

Each request is framed as routine, accompanied by assurances that disbursement is imminent.

As the process continues, further charges may be introduced. These include so-called stamping fees for legal documentation, sometimes justified as payments to lawyers, in some cases, RM300 per lawyer.

By this point, borrowers may begin to question the escalating costs. But police note that many continue, driven by financial urgency and the belief that these are standard procedures in securing a loan.

When doubts set in

The final stage is often the most revealing.

Borrowers are informed that the loan is ready to be credited, only to be told that a technical issue, such as a problem with their bank account, has delayed the transfer.

After confirming with their bank that no such issue exists, they are then asked to make a significantly larger “commitment fee” of RM1,200 to resolve the problem.

It is typically at this point, police say, that suspicions crystallise and disputes emerge.

Following the money trail

Police further note that payments are almost always directed to bank accounts that do not belong to any legitimate lending institution.

Instead, they are deposited into accounts held by third parties, commonly referred to as mule accounts.

Investigators say these accounts are often provided by individuals who allow their banking details to be used in exchange for small sums of money.

Many come from financially vulnerable groups, including young people and even secondary school students seeking quick income.

This has led to a troubling consequence. Account holders, as the identifiable names in the transaction records, are often the ones arrested.

Police say a number of these individuals have already been charged and convicted, with some serving custodial sentences.

Operators who vanish

The main operators, however, remain elusive.

They rely on disposable phone numbers, shifting identities, and a decentralised structure that allows them to disappear quickly.

Once they sense that a borrower is no longer willing to make further payments, communication is abruptly cut off. The numbers used become inactive, and the trail effectively goes cold.

By then, investigators say, the perpetrators have typically extracted as much money as they can.

Authorities emphasise that the use of third-party accounts and rapidly changing contact details is a deliberate tactic designed to evade detection, complicate investigations, and shield the main actors from accountability.

Authorities stress that legitimate financial institutions do not impose a series of undisclosed payments after initial approval, nor do they condition loan disbursement on repeated, ad hoc fees.

Police further advise members of the public not to engage with or approach so-called money lenders operating through Facebook and similar social media platforms, warning that many of these operators are not authentic and do not represent licensed financial institutions.

They caution that such engagements carry a high risk of fraud and financial loss.

The public is urged to verify lenders through official channels and to treat any request for upfront payments with extreme caution.

The cases point to a broader reality: in an environment where financial distress meets digital accessibility, deception can be engineered with alarming ease and detected only when the damage is already done.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.