Combatting Scam Ads in Malaysia: MCMC Urges Intervention and Punishment for Platform Accountability

The Malaysian Communications and Multimedia Commission (MCMC) is examining the current self-regulatory framework. There is a growing amount of content being misused by criminals and individuals endangering public safety. OTT applications and social media platforms have not adequately regulated their platforms according to Malaysia’s laws and national interests.

MCMC recognizes the increasing number of scams, particularly on Facebook. The regulator emphasizes the need for stricter oversight and intervention to safeguard the public interest and protect users. MCMC Chairman, Tan Sri Mohamad Salim Fateh Din, vows to take action against the abuse of online platforms for scams, cyber activities, frauds, and content that threatens racial stability and religious harmony. MCMC works alongside the Royal Malaysia Police (PDRM) and Bank Negara Malaysia (BNM) as part of the NSRC (National Security Council).

The National Anti-Financial Crime Centre (NFCC) works with MCMC to combat fraud issues and take strong actions against offenders. Since October 2022, the National Scam Response Centre has received 11,858 scam complaints as of April 2023. The Commercial Crime Department of the Royal Malaysian Police has recorded losses of RM1.2 billion from 2021 to April 2023. MCMC recommends regulatory oversight and intervention due to unchecked abuses and harm caused by platform providers. The interventions should include imposing obligations on platform operators to prevent the misuse of their platforms and protect the public interest.

MCMC suggests interventions to enforce obligations on digital platforms. Singapore, Vietnam, and Indonesia have enacted or are enacting laws to regulate and criminalize fraudsters on these platforms. Platforms failing to follow government directives or allowing malicious activities like advertising scams may be held accountable. MCMC will review the regulatory approach to enhance oversight through legal instruments. This may involve reviewing exemptions, imposing criminal sanctions, and punitive orders on entities that fail to address criminal activities on their platforms. Communications and Digital Minister Fahmi Fadzil instructed MCMC to investigate Meta’s failure to tackle online scam ads on Facebook and Instagram. Scam ads misusing the images of Fahmi Fadzil and Perlis Menteri Besar Mohd Shukri Ramli have been reported, prompting police action.

Meta is accused of prioritizing revenue over user safety. They have been neglecting their responsibility to protect users from harmful ads and content. Basic checks on new advertisers and a local moderation team in Malaysia could help prevent scams and inappropriate ads. Meta currently relies on algorithms and overseas review teams, lacking personnel in Malaysia to address these issues. Despite earning significant revenue from advertising in Malaysia, Meta has allocated minimal resources to address scam ads locally. To address impersonations, Meta’s CEO Mark Zuckerberg proposes Meta Verified, which requires users to pay about RM60 per month. Zuckerberg argues that providing direct customer service support would be costly for the company.

MCMC’s power to take action on social media platforms hosted overseas is limited by current policies. However, MCMC can use its existing powers to pressure Meta (formerly Facebook) to address scam ads immediately. In the past, MCMC blocked the Steam platform until it complied with a request to remove a controversial game. MCMC could use similar powers to require Meta to establish a local moderation team and respond to scam reports within 24 hours. Indonesia made it mandatory for digital platforms to register and comply with take-down requests within specified timeframes or risk being blocked. Meta (Facebook and Instagram) faced potential blocking but complied with the regulations by the deadline.

MCMC instructed telcos to block SMS containing links starting from 2nd May. Scammers have adapted by using WhatsApp instead to carry out their activities. WhatsApp is a platform owned by Meta (formerly Facebook). Scammers have shifted their focus to WhatsApp, taking advantage of its messaging capabilities.



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