KUALA LUMPUR (April 24): While many Malaysians are scrambling for a financial lifeline as the Covid-19 pandemic devastates businesses and weakens the labour market, they should be wary of loan scams.

In cautioning against such frauds today, Public Bank Bhd said the scammers will claim to be from a legitimate and licensed money lender offering low interest rates to fool unsuspecting victims. And such scams are usually advertised to the victims via social media platforms, e-mail, SMS (short message service) or unsolicited calls.

"Once a victim decides to apply for the loan, they will be told that their credit score is not good enough to obtain the loan. The scammers will then ask the victim to transfer a certain amount to a given mule account, in order to adjust the credit scoring," it said in a newsletter sent to clients.

Once the funds have been transferred, the scammer will deposit a closed account cheque into the victim's account, it said. The victim will then be asked to pay additional upfront fees — during the cheque float period — prior to the release of the funds.

Subsequently, the cheque that was issued by the scammer will bounce and the promised funds will never be released. "The advanced fees that were paid to the customers will also be lost," Public Bank said.

So, ignore loan advertisements that are made through social media platforms, e-mail, SMS or over the phone, it said. "If the deal is too good to be true, then it probably is," it added.

The bank also advised the public to do some research, in order to ensure that the lending organisation is a licensed money lender, before engaging with it.

According to Bank Negara Malaysia, the country's unemployment rate is expected to shoot up to 4% this year, from 3.3% in 2019, after the nation was forced into a partial lockdown to contain the Covid-19 outbreak.

The Movement Control Order, which will be entering the fourth phase come April 28 and last until May 12, has weakened the country's labour market as businesses were forced to suspend their operations, except for those categorised as "essential services".

A survey by the Department of Statistics Malaysia found 46.6% of self-employed respondents had reported losing their jobs due to the MCO.

The findings of the survey also showed that the agriculture and services sectors recorded the highest percentage of job losses, as compared to other sectors.

Some 168,182 respondents aged 15 and above, participated in the survey, which also found an estimated nine out of 10 respondents were still working with lower-than-usual salaries.

"In terms of financial savings, more than two-thirds (71.4%) of self-employed respondents have savings sufficient for less than one month.

"Only 6.2% of respondents said they were less affected and 52.6% of respondents informed they were financially most affected," according to the department.

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