BPQ3233 [Business Law]

Group Assignment
[Semester 01 Session 2023/2024]

CASE STUDY:
SCAM INDUSTRY IN INDIA
Name of Group : GROUP H
Name of Instructor : MR. WAN NAZRUL HELMY BIN WAN MOHD ZAIN
Deadline : November 17, 2023
List of Contributors

Thurga D/O Anbalagan

[PC21077]

Ong Shi Ying Siti Zuraini Binti Menaga D/O

Nur Amalin Husna Binti
[PC21135] Muhamad [PC21038] Kanaeswaran
Ahmad [PC21057]
[PC21086]
 Table of Contents
1. Definition of economic crime
2. Position of scam industry in economic crime
3. Global concern over the seriousness of scam industry
4. Socioeconomic impact of scam industry to global and local
security
5. Modus operandi of scam industry operators
6. Reasons of thriving scam industry in India
7. Legal reactions by the authority against scam industry
8. Legal enforcement challenges against scam industry
9. Recommendations to improve international action against scam
industry
10. References.
1.0 Definition of Economic Crime

In the scam industry,

economic crimes are defined
as dishonest or deceitful acts
carried out with the aim of
illegally taking money or
Economic crime other financial benefits from
includes any illegal victims. This could involve a
An illegal act that is
activity performed for variety of frauds, including
committed by an
financial gain such as identity theft, Ponzi schemes,
individual or group of
scamming, money online phishing, investment
individuals to gain
laundering, fraud, fraud, and other fraudulent
financial and
misuse of funds and schemes intended to defraud
professional
corruption. people or organizations of
advantage.
their money.
2.0 Position of scam industry in
Economic Crime
Economic Toll of Fraudulent
Practices
Fraud in the economic realm
inflicts significant financial
losses, not only causing
monetary harm but also
heightening consumer wariness
towards online platforms. This,
in turn, diminishes economic
activity, negatively impacting
global consumer confidence
and productivity by eroding trust
in financial systems and
institutions.
Fraud Industry's Role in Global
Economic Crime
Employing diverse tactics like
phishing, virtual investments,
and illicit transactions,
fraudsters intimidate
consumers, stealing personal
information and bank
accounts. The myriad
fraudulent methods used by
scammers result in financial
losses for victims,
contributing to the global
landscape of economic
crime.
Social Ramifications
of the Fraud Industry
Beyond economic
implications, fraud
generates negative
societal effects, including
the erosion of trust, harm
to social cohesion, and
the potential redirection
of young individuals
towards improper
criminal paths.
2.0 Position of scam industry in
Economic Crime

Collaborative Criminal
Advancement through Technological Pervasiveness of
Networks and Cybersecurity
Evolution Fraud
Challenges

The continuous progress in
technology has led to the
constant evolution of fraudulent
tactics. Advanced techniques
utilized in cybercrime, such as
phishing attacks and malicious
software, make it increasingly
challenging to combat fraud.
Consumer inadvertence with
software may result in hackers
infiltrating networks, leading to
the loss of both money and
personal information.
The fraud industry often Fraud spans multiple
involves collaborative domains, including the
criminal networks that span Internet, telephone, banking,
multiple regions and and investments. This
complexity makes it difficult
countries. Law enforcement
for consumers to
agencies struggle to
immediately discern the
promptly combat these
authenticity of messages,
crimes, necessitating making them vulnerable to
international and national scams. Collaboration
cooperation to effectively among fraudsters across
address the perpetrators. various domains further
hampers authorities' ability
to combat crime.
3.0 Global concern over the
seriousness of Scam Industry

TECHNOLOGICAL IMPACT

Growing technological
CHALLENGES IN LAW proficiency in scams such as
ECONOMIC IMPACT ransomware attacks, social
ENFORCEMENT
engineering, and phishing
raises concerns about the
Law enforcement
Scams cause significant possibility of increasingly
organizations have difficulties
financial losses for pervasive and destructive
as a result of the scam
individuals, companies, and cyber threats. Better
industry's dynamic and
governments. The cybersecurity safeguards are
changing character. Since
seriousness of these always needed since
fraudsters frequently operate
economic consequences scammers are always
from countries with lax
adds to concerns over the adjusting to new
legislation, international
general stability and technologies.
cooperation is necessary to
stability of financial coordinate efforts to find and
institutions. prosecute them.
3.0 Global concern over the
seriousness of Scam Industry

IMPACT ON TRUST EXPLOITATION OF VULNERABILITIES

Scammers usually take advantage of trust, fear,
The credibility of digital communications,
or ignorance, or other behavioral weaknesses in
financial institutions, and online transactions is
people. The manipulation of psychological
undermined by scams. For the digital economy
variables highlights the necessity of thorough
to continue expanding and developing, trust
education and awareness campaigns to equip
must be rebuilt and maintained.
people to avoid becoming victims of frauds.
3.0 Global concern over the
seriousness of Scam Industry

HUMAN TRAFFICKING

Through fake job advertisements,

victims are drawn to online scam
sites where they are forced into
large-scale financial crimes made
possible by cybercrime.

Victims of human trafficking must deal with

extortion, forced labor, and other forms of abuse
as part of this double-edged crime. Concurrently,
these trafficked persons are used as tools for
online fraud, including global schemes including
cryptocurrency-related fraud, romance frauds,
and investment fraud.
4.0 Socioeconomic impact of
Scam Industry to Global and
Local Security

● Scams make people lose trust and confidence in

online dealings, banks, governments, and others
Loss of trust and who are scammed or affected by scams.
01 confidence ● This can make people less willing to do business,
invest, or work together with others.

● Scams can cause direct financial losses to

Loss of income and
02 wealth
the victims, who may lose their savings,
investments, or assets.
4.0 Socioeconomic impact of Scam
Industry to Global and Local Security
● Scams can threaten the security and
Loss of security and stability of individuals, organizations, and
03 stability countries, by exposing them to various risks
and vulnerabilities.

● such as money laundering, terrorism financing,

Scams can facilitate cyberattacks, and human trafficking.
04 other criminal ● For instance, scammers may use stolen identities,
fake documents, or online platforms to transfer
activities illicit funds.
5.0 Modus Operandi
of Scam Industry Operators

Whatsapp Get rich quick Clone firm

phishing scams scams
scams

● These are scams that

These are scams These are scams
use Whatsapp to send
phishing links or that fraudulently
that promise very
messages to users. impersonate a
high returns in a
legitimate or a
short period of time
● The phishing links or licensed entity,
messages may
with a small initial
such as a public
contain malware or investment. listed company, a
spyware that can bank, or an
compromise the
investment firm.
user's device or data.
6.0 Reasons of thriving Scam
Industry in India
Economic Inequality:
The pursuit of quick wealth due
to poverty makes individuals
more susceptible to fraud
01
Insufficiency in Legal and
Enforcement Systems:
Law enforcement agencies lack
adequate resources and
technology to track and prevent
criminal activities.
02
Blindly Following Incorrect
Instructions: Victims are prone to
adhering to and believing
05 fraudsters' requests, leading to
instances of deception.
Lack of Educational Attainment:
04 Insufficient awareness of financial
and cybersecurity among the public
makes it easier for fraudsters to
deceive and steal information.
Digitization and Technological
03 Proliferation: The freedom of the internet
provides fraudsters with more
opportunities to exploit technological
vulnerabilities for fraudulent activities.
7.0 Legal reactions by the
authority against scam industry
More accurate information
01
Enhance information exchange
02 to thwart counterfeiters
Supplying information about identifying and avoiding fraud
Supplying information about identifying and avoiding
more frequently. This entails spotlighting the most dangerous
fraud more frequently. This entails spotlighting the most
scams on social media and the Scamwatch website, as well
dangerous scams on social media and the Scamwatch
as providing prompt and consistent warnings.
website, as well as providing prompt and consistent
warnings.
To enhance the sharing of scam data between the public and
private sectors, the ACCC is developing a new system.
High-frequency secure data sharing between various
authorities, law enforcement, and business will be supported
by this system.
7.0 Legal reactions by the
authority against scam industry

Most scams are fraud or deceit offences. This implies that the
Encourage law enforcement task of apprehending and prosecuting con artists falls to law
03 enforcement organisations. collaborate closely with federal and
state law enforcement agencies.

Compared to other organisations, government departments

Utilise Analytics to Spot Possible frequently manage large data volumes, but they frequently
04 Fraud
lack the resources needed to properly analyse and identify
possible fraud.
8.0 Legal enforcement
challenges against scam industry
Due to the GDPR and other
technical developments, law
enforcement is no longer able
to access vast amounts of
data, which makes it
challenging to identify
individual individuals. Their
work is greatly impacted by this
lack of data, which frequently
results in the postponement or
termination of investigations.
Missing Data
To creating difficulties for
law enforcement in
identifying offenders,
criminal infrastructure, and
electronic evidence, the use
of encryption,
cryptocurrencies, and other
technologies such as cloud
storage and the dark web
can cause data loss.
Absence of place
Because legal systems differ
greatly, it can be difficult to
investigate and prosecute cyber
crimes across borders. Effective
investigations are made difficult
by these discrepancies, which
have an impact on the
criminalization of conduct and
investigation techniques.
Difficulties relating to
country legal
systems
8.0 Legal enforcement
challenges against scam industry
Despite variations in national
laws, the absence of a
unified worldwide legal
framework presents serious
obstacles to international
cooperation, particularly
when it comes to massive
cyberattacks that affect
several continents.
Barriers to global
collaboration
The absence of a well-defined
legal framework delineates the
manner in which the private
sector can engage in law
enforcement cooperation while
maintaining client privacy.
Newer technologies that have
both potential for detection
and prevention as well as
threats of illegal abuse that
could feed cybercrime.
The difficulties associated
with public-private
partnerships
9.0 Recommendations to improve
international action against scam industry

Enhanced Collaboration
Encourage countries to collaborate and share
information on scams, including intelligence,
victim data, and tactics used by scammers.

International Task Forces Public Awareness Campaign

Establish international task forces with law
Collaborate on global public awareness
enforcement agencies from various
campaigns to educate people about
countries to investigate and prosecute
common scams and how to protect
transnational scam operations.
themselves.

Harmonize Legislation Financial Institutions

Promote the harmonization of anti-scam Work with international financial institutions
legislation and regulations across countries to track and freeze the assets of scammers.
to make it easier to pursue scammers
across borders.
10.0 References
1. Abraham Bliss. (2023b, March 21). Scam Industry As The Core Business In world,
https://www.csis.org/analysis/cyber-scamming-new-destination-human-trafficking-
victims
2. BW Online Bureau (2023). Economic Crime, Fraud Continue to Plague Indian
Companies: PwC India.
https://www.businessworld.in/article/Economic-Crime-Fraud-Continue-To-Plague-I
ndian-Companies-PwC-India/11-05-2023-476163/
3. Commonwealth Fraud Prevention Centre. (2020, February). The Total Impacts of
Fraud.
https://www.counterfraud.gov.au/total-impacts-fraud#text=Fraud%20can%20unde
rmine%20national%20defence,further%20crime%20and%20terrorist%20attacks
4. International Criminal Police Organization. (2023, June 7). INTERPOL issues
global warming on human trafficking-fueled fraud.
https://www.interpol.int/en/News-and-Events/News/2023/INTERPOL-issues-global
-warning-on-human-trafficking-fueled-fraud
10.0 References
6.SC Discloses Findings On Clone Firm Scams - Media Releases.
https://www.sc.com.my/resources/media/media-release/sc-discloses-findings-on-clon
e-firm-scams.

7.Securities Commission Exposes Modus Operandi Of Clone Firm Scams.

https://www.businesstoday.com.my/2022/05/31/securities-commission-exposes-mod
us-operandi-of-clone-firm-scams/.

8. The Global State of Scams Report 2022 | Group-IB.

https://www.group-ib.com/resources/research-hub/gasa-2022/.

9. Vulsan X. (Aug 21, 2023). Why should every company conduct scam awareness
campaign,
https://www.linkedin.com/pulse/why-scam-awareness-campaign-must-do-every-comp
any-vulsanx#:~:text=Promoting%20scam%20awareness%20campaigns%20in,respo
nd%20to%20such%20situations%20appropriately.