#NewNormal: Should You Get A New Car In A COVID-19 World? Here’s What An Expert Says

  • By CompareHero.my
  • July 14, 2020

COVID-19 and the Movement Control Order (MCO) have affected the automotive industry in Malaysia. Car sales and prices are expected to change and now car loan rates have gone even lower. Is it the best time for you to get a new car in the new normal? Read this article to find out.


Malaysia’s automotive industry took a significant hit when the Movement Control Order (MCO) and Conditional Movement Control Order (CMCO) were implemented to control the spread of the COVID-19 virus, as the majority of businesses were forced to shut down including operations of vehicle plants, car showrooms and service centres.

The severe impact is evident by the 25% drop in the total industry volume (TIV) from 143,064 units last year to 106,248 units this year, according to MyPF. 

Overall, the hit on the automotive industry will be significantly felt by the country’s economy, as Malaysia’s automotive industry contributed around 4.3% to Malaysia’s gross domestic product (GDP) in 2019, according to the Ministry of International Trade and Industry (MITI).

COVID-19 effects on car sales – Malaysia’s auto sales dropped by 99% during MCO


April 2020 data from the MAA as seen on PaulTan.org. (Image source: Paul Tan)

The bleak outlook was resonated by the Malaysian Automotive Association (MAA), who lowered their 2020 sales target from 607,000 units to only 400,000 units in the wake of COVID-19. 

The sales volume for the month of April – when the country was at the peak of COVID-19 – was one of the worse performing months recorded, as only 141 vehicles were sold, a 99.37% decline from the 22,478 units sold in March this year. This drop, MAA cites, was due to all automotive operations ceasing until May 12 as the automotive sector was not ranked under essential sectors.


May 2020 data from the MAA showed some improvement compared to the previous month. (Image source: Screengrab from MAA)

Though it improved by a mile, sales volume in May 2020 was still lower –  62% lower (22,960 units) than the corresponding month in 2019 (60,760 units). 

The poor market performance could be attributed to people’s ongoing fear to leave their houses, on top of consumers’ continuous cautious sentiment, according to MAA. The association predicts higher traffic to showrooms after the announcement of the sales tax exemption as part of the PENJANA initiative by the government (we analyze more on that further below). 

From the manufacturer perspective, the impact of the pandemic has been costly, as lockdown measures have disrupted global supply chains. This is especially true for automotive firms that import parts and components from affected countries, experiencing delays in either production or delivery of parts and components.

On the consumer’s end, there are serious concerns if the automotive industry could ever recover as the new normal poses serious questions over the eligibility of owning cars. 

Global professional services firm, Marsh, states in their report that manufacturers may have to consider the impact of the virus on consumer behavior, as based on anecdotal indications, some consumers may question their continued need to invest in cars. “We may thus see an accelerated shift to mobility services, such as on-demand, subscription, rental, and less direct ownership,” states the report. 

To counter similar fears, Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad told The Star CarSifu that a proposal had been submitted to the government regarding the automotive industry, as part of their own contributions to help jump-start measures for the automotive industry. 

“Among the measures proposed are easier hire purchase approvals, and lower taxes or duties for at least until the end of this year. We have also requested for the calculation of the open market value (OMV) of a vehicle to be reverted to the previous formula, so that the duties imposed for locally assembled cars do not increase,” she told CarSifu.

Now with the larger picture in mind, it’s clear that the automotive industry will require some time to fully recover, but what does the past few decline in sales mean for every day consumers like you and I? Would it lead to a more favourable market for buyers? 

First things first, it’s crucial to remember that due to the economy’s progressive recovery, there may be uncertainties in both the national and global economies. In turn, this may alienate consumers from investing in big ticket items like automobiles. 

Meanwhile, Malaysians may also opt to save their money and prioritize elsewhere as other issues arise like rising unemployment, pay cuts and high cost of living. Without a steady income, slow economic growth and fear of financial security, buyers may not be as tempted. 

To get a clearer picture of the situation, CompareHero.my spoke to an expert and a car seeker to examine whether purchasing a new car amid COVID-19 is the right decision.

How has COVID-19 and MCO impacted car prices? A financial advisor weighs in


Dr. Desmond Chong said financial and non-financial checklists will help you navigate the car buying process. (Image source: Dr. Desmond Chong)

It may sound counterintuitive but the NST reported that Sime Darby Motors Sdn Bhd (SDM) has seen a “boom” in demand for its vehicles, possibly due to the government’s Pelan Jana Semula Ekonomi (PENJANA) stimulus package, a RM35 billion initiative that includes sales tax reduction on passenger cars. 

The positive market response to its recent sales campaign, NST reports is an indication that consumers would still view personal vehicles as an important investment for their safety and in maintaining social distancing, according to SDM managing director (retail and distribution) Jeffrey Gan. SDM did not disclose any sales figure.

“With the added tax exemptions as incentive, we are seeing signs of recovery as foot traffic and orders across all our brands are returning to pre-lockdown levels,” Gan said in a statement today.

But does a relatively bull market translate to it being the right time to buy a car? AKPK financial education trainer and Deputy President of Malaysian Financial Planning Councils Dr Desmond Chong Kok Fei, believes so. He told CompareHero.my that lower interest rates are one of the factors that could make purchasing cars at this juncture an attractive option for Malaysians. 

“On top of that other ongoing offers by car manufacturers or dealerships may make it more attractive too. That is another reason why it’s a good time to buy a car if you’re sure about buying a car,” he added. 

However, besides the government tax exemptions, Chong said other price reductions vary and are highly dependent on supply and demand as well as the manufacturer’s product offerings. 

The first time buyer threading new automotive waters

Jagmaya Gill, 28, a doctor who has been working for three years is currently looking for her second car. She started her car searching process in the past six months after realizing she needed an upgrade and safer option from her first, hand-me-down car from her parents. “I’ve been using a second hand car for the past six years with less safety features such as airbag and abs systems etc. – I worry about safety.”

Realizing the significance of purchasing a car, Jagmaya has been taking a longer time – or one year to be precise – to compare and contrast the products offerings in the market. “I have commitment issues (laughs)! I have to think real clearly before committing to a new loan. It’s not like any ordinary purchase, it’s a huge commitment, which I shouldn’t take lightly,” she said. 

Fortunately for her, COVID-19 has not impacted her car searching process. If anything, it’s made the search better – the pandemic and MCO has resulted in various discounts and promotions. 

Though these promotions are intended to encourage more buyers to stimulate the economy –  Jagmaya said she’s wary of any superficial offers that may pop up at this time due to the possible higher demand. “It may be tempting to get a bigger and more luxurious car because of the enticing offers, but I need to remind myself that it’s the opposite of what I’m looking for – a more affordable car.”

Though there are many variables to consider when it comes to purchasing a car, the ultimate factor for her is the price. “I don’t want to commit to high monthly repayment schemes. I need an affordable, suitable car for town driving. More importantly, it needs to be a safe car. Also looking for a compact car since I’m not great at parking in tiny crowded spots at my workplace,” she said. “For a car loan and insurance, the commitment duration is important for me.” 

The PENJANA stimulus package tax exemption 


To revitalize the economy, the government has introduced the PENJANA initiative. (Image source: MOF)

The PENJANA initiative includes a complete waive of the 10% sales tax imposed on complete knock down (CKD) passenger vehicles, aka locally assembled cars. On the other hand, sales tax on completely built-up (CBU) passenger vehicles, aka imported cars, will be halved to 5%. This sales tax reduction on passenger cars started on 15 June until 31 December 2020. For more information visit here. 

Following this announcement, many vehicle brands released new prices of their products to reflect the tax exemption initiative. Scroll further down to see some screenshots of what we could find online. Just remember that these prices may shift over time or vary for people in different states. On top of that, there may be other promotions not advertised by dealerships. 

For a comprehensive list of sales and promotions by automobile companies, we highly recommend you check out this list of ads on Paul Tan. It’s super helpful if you need a head start, especially if you don’t work with a car agent. 


Into Japanese cars? Check out this list by Honda. (Image source: BigRoad)



Perhaps you are into the new Proton X70. (Image source: BigRoad)



Another local alternative is Perodua. (Image source: Lester Chan)



Toyota may entice you too. (Image source: Louis Tan)



If you are into Mazda cars, tee up with Bermaz Auto Berhad, the main and authorized distributor of Mazda vehicles & spare parts based in Malaysia. (Image source: BigRoad)



Getting a car in today’s market could be tempting. But there are a few factors to consider before you proceed. 

Read this checklist before buying a car – here’s what you need to know 

Though there are tax incentives and many promotions to entice and encourage Malaysians to purchase cars in the current market, there are a few rules that you should tick from your checklist before deciding to buy a car. 

“Before anything else, the decision on whether or not you should buy a car goes back to your need vs wants,” said Chong. “For many, a car is a need – essentially without it I won’t be able to travel to work for example. It could be a want if you have other alternatives, like public transport or carpooling but you’re reluctant to because of convenience.” 

For those who are categorized under needs and have the financial muscle, Chong said now is definitely a good time to purchase a car, especially with all the aid and promotions available. 

He also shared that another group of buyers who should take advantage of the current market are those who have fully paid off their car loans and are looking for a new car to replace their old vehicle. “If you’re in that category and you realize your maintenance fees are constantly hiking, then now is a good time for you as well.” 

Chong advises all car buyers to come up with a simple financial checklist that covers the risks and gains before deciding to purchase a car:

1. Employment. Are you still employed?

2. If so, are you at risk of being unemployed? What’s your level of job security?

3. Is your job at risk in the coming months? 

Stop right here. If you answered with a yes for all three questions, Chong said now may not be a suitable time for you to purchase a car as losing a job will severely affect your repayment capacity and having secure cash flow is an essential requirement before buying a car. 

If you answered no to all the above, then you may proceed to the next few questions.

4. Do you have enough savings for your down payment?

5. How much is your debt service ratio?

What is a debt service ratio? It’s simply a calculation used by banks to check whether you can repay the loan.

In this scenario, after considering all your different loans and commitments (housing loan, personal loan, insurance etc.) and it amounts to 50% of your total income, then you may be at risk of overspending, said Chong. 

Related: How do I calculate my Debt Service Ratio?

Chong also advises buyers to have a non-financial checklist to ease the decision-making process. 

  1. Are there alternative transportations that you can consider? Such as taking the bus or train? Perhaps you have a friend you could carpool with?

    If the answer is yes, Chong advises potential buyers to give themselves at least a month to test the waters to see if it’s feasible in the long term. 

  2. Is parking readily available where you live and work?

  3. Not sure? Find out. “People often forget other miscellaneous costs associated with cars like toll and parking,” Chong said. “Those are important too – don’t leave them out.”

  4. Find out what is the current rate of the borrowing costs. “Certain cars like BMW and Mercedes, will give subsidized rates,” Chong said. “It should be part of your research process.”

  5. Which should you get – Islamic loan or conventional loan? The varying factors include interest rates, risk sharing and your own values. For a more in-depth understanding between the two, check out this piece we wrote earlier, to help you decide.

  6. Do you still have an existing loan?

If you said yes to the final non-financial point, then you may want to consider these next few pointers too. Coming up with another separate checklist may help interested buyers with existing cars when disposing their cars. 

  1. What is the market value of your existing car?

  2. What is the redemption amount if you still have a loan?

  3. Selling off your current car – do you have potential buyers on hand? Car dealers are available to help you with that.

  4. Transferring car ownership to car dealers or buyers.

    “We’ve had issues in the past where dealers don’t transfer the names and there’s an unsettled loan – so that’s a double impact on their finances,” Chong said. “This could be a case of sambung bayar aka continued payment.” Based on research, we found out this scheme to be highly discouraged in Malaysia!


Car may or may not be a good investment for you. It goes back to your own objective and goals. 

Remember – cars are not investments, but liabilities

It may be tempting to get your hands on the latest car model, but unlike property, a car is not an investment. Though it is an asset, it depreciates overtime, making it less valuable to your wealth growth. 

Related: Do you buy a House or Car first? [RESULTS]

“It’s a simple concept, the reason why cars are depreciating assets is because if you have a newer one, why would you want to use an old one? Their values don’t grow over time,” Chong said, explaining why cars have depreciating values. Additionally, cars can be produced on a mass scale, unlike property that are limited and restricted due to the scarcity of land. 

Similar to your cellphones and computers, a car loses value the moment it gets out of the showroom and is driven off the lot, and it will continuously lose more value as time goes on. It makes sense why some of the richest don’t use expensive cars, for instance, American billionaire Warren Buffet reportedly bought a Cadillac XTS in 2014, a car with a retail price of around $45,000 (RM191,970) as an upgrade from his previous car: a 2006 Cadillac DTS. 

But antique cars do have resale value due to its “sentimental value,” according to Chong. Some cars that were bought for a couple hundreds or thousands could sky up to RM20,000, he said.

So, should you get a car in today’s COVID-19 world? Totally! But only if you fulfill most of the requirements laid out in the checklist – to be safe. 

Buying a car is probably the second biggest investment that you’ll make in life after getting a property. Therefore, it’s critical that you take your time and really think through the different factors that will impact your finance and purchase. 

Read also: #NewNormal: Top 3 Factors To Consider Before Buying A Car In Malaysia

Read More

How Malaysians Can Take Advantage Of The Lower Overnight Policy Rate (OPR)

  • By CompareHero.my
  • July 13, 2020

Bank Negara Malaysia (BNM) announced another Overnight Rate Policy (OPR) cut, making it the fourth reduction for 2020 on 7th July 2020. As a Malaysian, how can this low interest affect you in the best way? Here are 6 savvy ways on how you can take advantage of this lower OPR.


If you’ve been following our local financial news closely, you’d probably have seen words like “OPR” and “cut interest rates” popping up in headlines. If you’re lost, we’ll fill you in.

Just recently, Bank Negara Malaysia (BNM) announced that they had cut the overnight policy rate (OPR) for the fourth time this year, now to a record low of 1.75% – the lowest since 2004. As a move to stimulate the economy in a COVID-19 world, OCBC Treasury Research economist Wellian Wiranto said to The Edge Markets that this is “a testament of just how unprecedented our current situation has been”.

If none of the above makes cents sense, don’t worry – we’ll break it down for you.

What is Overnight Policy Rate (OPR) and why does it matter to you?

If any part of your life has anything at all to do with a bank, then yes – the OPR affects you.

If you’re a borrower, you’ll know that all your loans come with an interest rate. These rates are dependent on the Overnight Policy Rate (OPR) set by Bank Negara. If the OPR increases, so will interest rates. If the OPR decreases, so will interest rates.

Increasing or decreasing the OPR will immediately increase or decrease the cost of borrowing for banks, and thus, will lead to a chain effect… and therein lies the opportunity for consumers like you and me.

For borrowers, it’s a time to enjoy. One of the biggest benefits of a low interest is that debt servicing charges are lowered significantly, likewise with loan instalments with variable interest rate loans. Basically, this means that if you buy a big ticket purchase that requires financing help from the bank, you’ll get a much better rate when the OPR is low.

However, it’s not-so-good news for those who depend on the interest on their savings/current accounts and fixed deposits. With the lowered interest rate, the existing money in the bank will not grow like before (until the OPR increases).

(TL;DR) OPR rate drop = lower interest rates = cheaper loans that encourage you to borrow from banks, also lower ROI from existing money in banks (e.g. savings, FD)

Okay, so why did Bank Negara lower the OPR?

As you know, we’re one of the many countries impacted by the COVID-19 pandemic. With everyone holding back, a lower interest is designed to encourage the public to spend during these difficult times. By spending more, we’ll stimulate the local economy and hopefully recover fast enough so that the country doesn’t go into a recession.

In a conversation with Focus Malaysia, Sunway University Business School economics Professor Dr Yeah Kim Leng said that now, consumer sentiment is weak and people and businesses tend to hold back more. When people hold themselves back from spending, money doesn’t move or grow.

With a lowered interest rate, people would be more likely to jump on the opportunity to borrow from banks to finance the things they need – investments, a new home, a new car, so on and so forth.

“So, from a consumer’s perspective, a rate cut makes things easier on our pockets. […] Typically, a lower rate will encourage those who are creditworthy to use more debt for spending or investments.” – Professor Dr Yeah Kim Leng to Focus Malaysia

How to take advantage of low OPR rate in Malaysia

So now that we roughly know how the OPR affects and benefits us as consumers, what would some of the immediate ways we can use to take advantage of the low OPR? Let’s start with the most obvious:

1. Buy a home – or your second, third, fourth…

Thinking of buying a home, whether for yourself or as an investment? Now would be a great time to do so.

Unless you have cold, hard cash to pay off the cost of a new property, you’ll need to borrow from banks. As a lower OPR would cause local banks to adjust their lending base rate (BLR) and base financing rate (BFR) accordingly, now would be a great time to secure a better deal with the bank so you can maximise your spending or have more to save.

Just to add to that, Jin Ooi, a team leader in real estate at Kith & Kin, previously told us that he’s already seeing and expecting a 20% decline in property prices at most as the market shifts into a buyer’s market as a result of COVID-19.

Besides, the government has also thrown in incentives for budding homebuyers as part of their PENJANA stimulus package as we head into an economic recovery – stamp duty exemption being one of them.

With so many benefits coming in at once, it does feel like the right time to invest in a new home – considering you have the financial capabilities, of course. By the way, we’ve covered the topic of property buying tips in this New Normal previously – read it in full here.

2. Consider getting a vehicle (if you need one)

While the returns of getting a new vehicle is… well… nonexistent, you may want to consider financing a car for the same reasons we highlighted in the point above. With a lowered interest rate, you can secure yourself a better repayment deal with the bank.

This is great if you were already thinking of getting a new vehicle, but never really took the leap. However, if you’re thinking of getting one just for the sake of taking advantage of a lower interest rate, you may want to think twice. Unlike property, the value of vehicles depreciates the second you buy it, so you’ll never be able to make back what you put in.

3. Refinance your current loans

So, let’s say you don’t have any plans to buy a new home… can you use the OPR cut to help you with your current mortgage? In an article from iProperty, we learn that as an existing borrower, you’ll get to benefit from:

  • Lower monthly instalment payments – banks would adjust their interest rates accordingly, but do give your bank a call to see if you’re eligible.

  • A shorter loan period – provided you pay off the monthly sum as per usual (basically not paying less as per (a) above), you may have the option to clear off your debt faster than you.


However, you have to check with your bank and your loan type (floating or fixed interest rate). If your loan falls under the latter, you probably won’t see a change in your monthly instalment payments. But don’t be disheartened – you can still take advantage of the OPR by refinancing your home. Refinancing basically means to replace an existing loan with a new loan.

For context, most people choose to refinance because they struggle to pay off their mortgage. Let’s make an example of Ali, who pays RM4,000/month to the bank to pay for his Mont Kiara condo. When the Covid-19 pandemic hit, he lost his job. He’s been using his savings to pay off his commitments, but it’s been 3 months and his savings are running dry. He had to settle for a new but lesser-paying job, and he doesn’t want to lose his Mont Kiara condo. With his new budget, he can only afford to pay RM3,000/month.

Ali then visits his bank to discuss a refinancing solution. The bank works out a solution with him, and adjusts his loan according to his financial situation – perhaps extending his tenure by 10 years.

So, as for yourself, you can always speak to your bank to see how you can take advantage of the OPR cut to refinance your home with the new interest rate. By refinancing, you can also work out a schedule to clear your debt faster.

Just be aware that refinancing comes with some additional costs to cover the administrative work, so you’ll have to run some calculations to see if it’s worth the value you’re getting in return. 

4. Remove money from your deposits to put into other higher interest investments

The money that you currently have in your bank – be it in your savings/current account, or in your fixed deposit – isn’t going to grow as much as it did when the OPR was higher. At this point, you can always consider taking them out and putting them into other higher-interest investments.

So, what kind of investments can you consider? In a recent article on the OPR cut, Fundsupermart research senior analyst, Jerry Lee Chee Yeong, told The Malaysian Reserve (TMR) that equities can generate higher returns albeit at a higher degree of risk.

“We always encourage our investors to adopt a portfolio approach for their investment. It is very important to have a well-diversified portfolio regardless of any market environment.

However, between bonds and equities, we like the latter. Bond yields have compressed significantly over the past one year, while the recent sell-off in global equity would have presented a good buying opportunity to investors.” –  Fundsupermart research senior analyst, Jerry Lee Chee Yeong to TMR


Rakuten Trade research VP Vincent Lau shares the same ideals, adding that the tech-related sector is prime as our lives become more digital and 5G being at the center of it all. Real estate investment trusts (REITs) are also a considerable option, as the OPR cut is expected to see more movement in the property market. (To read more about what experts had to say, head over to the full article by TMR here.)

Just remember – there is no such thing as a 100% risk-free investment. Do your own research and gauge your own financial capability before you jump into anything, and consider diversifying your investment portfolio so that you can withstand the negative impacts that may or may not come in the future.

5. Speed up your debt repayment with a personal loan

If you have any outstanding high interest debt (like credit cards) that is beyond your control, you can actually consider taking up a personal loan to clear it off.

Just to be clear, while the OPR cut immediately affects mortgage and car loans, it may not be as straightforward when it comes to personal loans. While you’re still technically borrowing from the bank, restructuring the interest rates for personal loans require a lot of effort on their end. While some banks may reduce their rates, some may throw in incentives (e.g. cash rebates).

In any case, an OPR cut could make personal loans a little more attractive. It’s best to follow closely what banks would be offering so you don’t miss out. You can always start by browsing through some of the existing personal loans available here, or simply follow us on Facebook for updates.

Getting back to the idea of speeding up your debt repayment – although it may seem counterintuitive to take up a loan when you’re already riddled in debt, consider this first. Personal loans – even without the reduction of the OPR – have a much lower interest rate (approximately 7%, could be more or less) than credit cards (approximately 15%, can increase depending on the size of your credit card debt).

6. Kickstart or grow your business with a loan

It takes money to grow money. In this case, you need capital to start or grow your business. 

Carrying on from our previous point about personal loans, you could take this time to reassess your business and see how a personal loan can help you make the necessary adjustments to further develop your offerings in this new normal.

You could also consider starting a whole new business, such as selling on e-commerce platforms or joining a franchise. Speaking of franchises, we have a list of 50 franchises – Tealive, Nelson’s, Boost Juice and more – which you can join in Malaysia ranging from RM15,000 to RM800,000. If you’re feeling itchy-handed, just read more about it here.

Whatever you do, ensure you are financially capable first

We’ve pretty much established that the low OPR is pretty good news to borrowers. But as with anything in life, the wisest thing you can do is to assess your situation first before you commit to anything new.

It’s also crucial that you weigh both ends of the scale, too. Capspring Temasik financial adviser Wong Lee Kheng told Focus Malaysia that people have to look at the value an investment creates against the incurring costs.

“The OPR cut is only an advantage if it has been part of the equation in your plan to buy a property or car from before the cut, otherwise you need to do your own research and speak to loan advisors to know more before jumping in.” – Capspring Temasik
financial adviser Wong Lee Kheng to Focus Malaysia


Last but not least, always remember that there is no such thing as a completely risk-free investment, so always do your own research or get help from a financial advisor to steer your finances in the right direction. Keep sufficient cash in your reserves, so you don’t have to struggle if things don’t go according to plan.

Read More

From Zero To Hero: 5 Financial Lessons From Liverpool FC Everyone Can Learn From

  • By CompareHero.my
  • July 9, 2020

Liverpool FC actually went through a financial crisis before earning their first Premier League title since 1990. It took some time for them to financially bounce back and arrive at the point where they are today, but how did they manage to do it? Let’s learn how they overcame the problem with these 5 financial lessons we can get from them.


Liverpool FC’s rebirth as champions of both England and Europe was made possible thanks to proper management, shrewd financial planning, and endless grit.

After 30 years of pain, Liverpool FC are finally back on the pinnacle of English football.

The Reds ended their long wait to be crowned champions of England – their first Premier League title since 1990 – on June 25 after Manchester City lost 2-1 to Chelsea at Stamford Bridge.

Their success was not an easy nor ordinary feat. Despite the club’s rich football history and reputation as one of the world’s biggest, the Reds were actually on the brink of bankruptcy just 10 years ago. They were struggling on and off the pitch and were drowning in financial debt and crisis under the disastrous leadership of its previous owners American duo Tom Hicks and George Gillett Jr.

But Rome wasn’t built in a day, and like other empires, this kind of sporting magic took years of careful planning to manufacture – current owners Fenway Sports Group (FSG) and manager Jurgen Klopp had to restructure and rebuild the team, relook into its finances and restrategize plans to pull it off.


The man of the hour – Klopp helped lead Liverpool to two successive European cup finals.

Eventually the 2018-2019 season was the start of their record breaking run. So far, two memorable campaigns have seen them bag their sixth Champions League, first-ever FIFA Club World Cup, a UEFA Super Cup, on top of sealing their 19th league title.

In their journey to winning the Premier League, they ran a record-equalling run of 18 consecutive wins from last October to February 29, winning every league match at home this season. They also won the league with a record seven games remaining, and 25 points adrift of second-placed City who were champions of the last two seasons.

Liverpool’s ascent to football dominance offers many interesting lessons for the masses, particularly in financial planning and management.

We analyze how the club skillfully utilized limited finances and resources to produce scintillating success both on and off the pitch.

1. Business is inherently risky, and it takes proper leadership to weather a financial crisis

Before FSG took over in 2010, Liverpool were at the height of their darkest period, becoming the talk of the town for all the wrong reasons.

On the pitch they slipped into the relegation zone after an embarrassing home defeat to Blackpool, while gathering just six points in their opening seven games – the club’s worst start to a season in 57 years. Off the pitch, they were on the verge of financial meltdown after talks of possible bankruptcy and landing a nine-point penalty.


Liverpool were brought down to their knees with problems on and off the pitch. (Image source: Liverpool Echo)

At this point in time, the club’s financial debt was standing at staggering £237million (RM1.2billion) and plans for a new stadium were put to a halt, costing the club an additional £50million (RM267million) as further redesign was necessary after plans went over budget.

All of this was far from the original promises made by Hicks and Gillett who took over the club in 2007 after paying a total of £174million (RM934 million) for the shares. They had vowed to pay off £45million (RM242million) of club financial debt and invest £215million (RM1.2billion) towards a new stadium.

This new stadium would supposedly accommodate 60,000 fans – and a potential for 73,000 – which would help rake in extra cash and boost the club’s financial muscles in the form of ticket sales.

“We have purchased the club with no debt on the club,” said Gillet on the purchase, according to BBC Sport. “The spade has to be in the ground within 60 days,” he vowed, on the club’s new stadium plans, according to The Guardian.

Within 12 months of their tenure, though, their promises were starting to become a distant memory as the owners took out a £350million (RM1.9billion) loan with the Royal Bank of Scotland (RBS). From that money,  £105million (RM546million) was loaded into the club’s books, while the remaining £245million (RM1.3billion) was absorbed by Kop Football (Holdings), the holding company set up by Hicks and Gillett when they bought the club, according to journalist Simon Hughes’ book Ring of Fire.


I knew you were trouble when you walked in? Former owners Tom Hicks and George Gillet could be two of the most unpopular figures in Liverpool history. (Image source: Christopher Furlong/Getty Images via bleacherreport.com)

More red flags began to pop up when Hicks’ spokesman publicly admitted that the club would face interest payments of around £30million (RM161million) a year on their borrowings – to break it down that’s £100,000 (RM537,270) per day in interest.

Soon there was total chaos at the club: fans no longer wanted the duo at the helm with numerous protests held against them, toxic power struggles between the co-owners led to in-fighting in the Anfield boardroom, issues with refinancing of the loan and poor public relations ruined the former owners’ reputations with supporters.

The nightmare finally ended when Gillet and Hicks were forced out of Anfield by RBS and New England Sports Ventures (now FSG) who purchased the club in October 2010 for a £300million (RM1.6billion) takeover, simultaneously wiping out their financial debt to end one of the most tumultuous periods in the club’s history.

It’s fair to say that at this point, the new owners not only injected the necessary cash needed to stay afloat, they also brought stability and progression to the club.

But Hicks and Gillet’s tenure was not the only example of bad leadership that could result in serious financial losses. Another poor appointment was that of Christian Purslow, who was asked to join the Liverpool board to “renegotiate the £350million (RM1.9billion) loan with RBS and to work with former manager Rafa Benitez on summer transfer targets,” according to a report by The Telegraph.

Though Purslow was tasked to find money through negotiation and managing assets, he did the exact opposite. Instead, he sold two of the club’s stars Xabi Alonso and Alvaro Arbeloa for way below their market value – a mere total £38 million (RM204million). Their replacements Alberto Aquilani and Glen Johnson, both underperformed and were unable to emulate similar on-field success despite costing the club £35million (RM188million).


FSG have awakened the sleeping giants from their long and painful doze. (Image source: Liverpool.com)

The clear lesson here is to ensure that the right people are steering the boat at the top, whether that boat is a large company or a small enterprise. Without proper leadership and guidance, a business could be on the brink of collapse if financial losses are not managed in the right hands.

Additionally, it’s not just the leadership at the top that’s changed Liverpool fundamentally – FSG have managed to bring in the right people across different roles, including manager Klopp.

2. Be smart about your loans – remember to pay off those financial debts!

There are many reasons to apply for a loan: you could be starting a new business or getting married or perhaps you’re continuing your education.

Regardless of the type of loan, what’s important to remember is that you’ll start accumulating extra fees if you skip loan payments. As a result of missing your payments, banks are allowed to charge you interests depending on the rate you’d have previously signed on during your application. When loans are not managed properly, they eventually snowball into a large sum of debt.

Related: What Happens If You Can’t Pay Your Loans In Malaysia Post-MCO (And How To Fix This Fast)


Fans were unhappy with the direction taken by both Hicks and Gillet during their tenure. (Image source: Oli Scarff/Getty Images)

Similarly, both Gillet and Hicks got a loan to purchase the club (although they said they would purchase the club with no financial debt saddled on top.)

In their first seven months of trading, Kop Football (Holdings) was facing losses of £33million (RM177million), followed by another £42million (RM226million), £53million (RM285million) and £43million (RM231million) in the next following three years. When FSG took over, the club were paying interest loan repayments of up to £340,000 (RM182,672) a week.

Had both Gillet and Hicks paid their loans on time, the club wouldn’t be racking up so much financial debt. If anything, their tenure taught us to practice proper money management so that we, too, won’t end up in large piles of loans.

3. Get the basics right first – balance your books consistently


Liverpool’s financial statement for the 2017/2018 season. (Image source: Liverpool Echo)

Balancing the books is a prerequisite to any healthy business, and Liverpool made a huge statement of their own when they were finally able to breakeven, before registering record-breaking financial figures.

In 2015 – five years after the change of ownership – Liverpool returned to profit for the first time in seven years, according to Goal. Two factors have been linked to this upturn in revenue: the Premier League’s lucrative television rights deal and the Reds moving back up to ninth from 12th in the Deloitte Football Money League.

“Since Fenway Sports Group completed its takeover of Liverpool FC in October 2010, revenue has steadily increased year on year and the club has transformed to a sustainable business,” according to Liverpool’s statement reported in Goal.

A few years later during the 2017-18 financial year, they broke the world record for the biggest pre-tax profit (£125million or RM672million) made by a football club.

That success, Andy Hughes, Liverpool’s chief operating officer told the Liverpool Echo, could be attributed to their success at reaching the Champions League final and selling star player Philippe Coutinho which helped net £142million (RM763million) – a shrewd piece of business considering he joined the Reds for a mere £8.5million (RM46million). Funds from Coutinho’s sale would eventually be used to secure another world class player who left a huge impact on their league winning campaign (hint: Virgin van Dijk).

“When you sell a key player and reinvest that money into the squad, you see a spike in profitability and then you see a dip in future years,” Hughes said. “Liverpool FC is in a much stronger financial position. We have been reinvesting all of our profits back into the club. You can see that in this period as well. Across the board it’s a really strong set of results which demonstrates FSG’s commitment to the club and reinvestment into the future of Liverpool FC.”

Hughes also pointed out that the club has been experiencing continuous revenue growth since FSG acquired the club in 2010. “On the media side, that’s driven largely by performance on the pitch and reaching the Champions League final was the main reason for that big uplift to £220million (RM1.2billion). In the previous season we didn’t have European football.”


Liverpool’s financial statement for the 2018/2019 season. (Image source: Liverpool Echo)

The 2018-2019 season saw Liverpool register more record-breaking numbers, as the Anfield club posted a record revenue growth of £533million (RM2.9billion) and pre-tax profit of £42million (RM226million). All other revenue streams posted significant growth as well.

Matchday revenue was up to £84million (RM451million) while media in-take grew by £41million (RM220million) to £261million (RM1.4billion).

Their success is partly due to their successful Champions League winning campaign last season – winning Europe’s top prize reportedly earned clubs around £67million (RM360million) – one of the big factors behind a revenue growth of nearly £80million (RM430million) in 2019, on top of other major factors like a new broadcasting deal and windfall coming from placing second in the Premier League.


In 2019, revenue had increased by 15.8% to £533million (RM2.9billion) compared to the year before. (Image source: Screencap of Deloitte Money League report)

That financial year, Liverpool maintained seventh position in the Deloitte Money League behind Manchester City, Paris Saint-Germain, Bayern Munich, Manchester United, Real Madrid and Barcelona.


Clubs are valued based on a number of metrics, financial and non-financial, such as attendance, worldwide fan base, broadcast audience and on-pitch success. (Image source: Screencap of Deloitte Money League report)

According to the Deloitte Money League report, clubs are ranked based on their ability to generate revenue from matchday (including ticket and corporate hospitality sales), broadcast rights (including distributions from participation in domestic leagues, cups and UEFA club competitions) and commercial sources (e.g. sponsorship, merchandising, stadium tours and other commercial operations).

Liverpool’s rising stock is also evident by positioning eighth highest in the world on Forbes’ Business of Soccer list which valuated them at $2.2billion.


Forbes magazine valuation of Liverpool saw a 12% year on year increase. (Image source: Screencap of Forbes)

Previously Liverpool were losing money like water out of a sinking ship, but now streams of cash are coming in from all corners: match revenue, media income and the commercial department, to cement the Reds’ success on and off the pitch.

“The message is what you see here is the outcome of a really strong and consistent strategy over multiple years,” Hughes told the Liverpool Echo. “That strategy remains unchanged and we will carry on with that plan and hopefully continue to improve.”

A screencap Tifo Football’s video shows Liverpool generated a 94% hike in commercial revenue after almost nine years of rebuilding. (Image source: Tifo Football on Youtube)

4. When it comes to investments, always have a strategy

When FSG arrived at Anfield, it was believed that they would carry their moneyball principles – the formula which was said to underpin their success at American baseball team Boston Red Socks (which they also own) – to Liverpool.

Liverpool Sporting Director Edwards (left) has been a key figure in their successful recruitment drive in recent years. (Image source: Liverpool FC)

FSG would go on to transform how Liverpool managed recruitment, squad-building and on-pitch success. Klopp, unlike previous Liverpool managers, works very closely with his recruitment team including sporting director Michael Edwards, head of recruitment Dave Fallows and chief scout Barry Hunter when it comes to sealing deals. This close working relationship is one of the reasons behind their success in identifying real talent and securing their services in the transfer market.

The club’s recruitment policy no longer revolved around purchasing players who were at their peak or were way into their prime with little to no resale value or room for improvement (does Paul Konchesky, Joe Cole and Milan Jovanovic ring a bell guys? The average age of those players was 28.6 years)


Hit or misses? All four players here, Mo Salah, Alisson, Roberto Firmino and Naby Keita can be considered hits so far. (Image source: Liverpool FC)

Instead, the new transfer philosophy would be centred around signing young, unearthed talent who would come in with room and potential to grow and improve, before eventually selling them on for a profit (if the player ends up leaving, of course). New recruits also had to fulfill certain age-criteria: around 25 and under. Their new transfer strategy was also largely supported with the use of data analytics to identify talent.

Thanks to Edwards (and team), who led these dealings, Liverpool were able to secure a number of high-profile signings, while still balancing their books, and offloading several deadwood stars for impressively big sums.

A few great examples:

  • Liverpool landed one of the world’s best defenders in Virgil van Dijk for a reasonable price of just £75million (RM403million). Today, he is worth maybe double what they initially paid for him. He, or more specifically Edwards, was able to finance this move by offsetting the cost against the sale of Coutinho. Liverpool were also able to cheekily add a clause into the deal which would cost Barcelona another £89million (RM478million) if they wanted to sign any more Liverpool players before 2020. Great business you gotta admit.

  • They secured Japanese hotshot Takumi Minamino for an impressive bargain of just £7.25m fee (RM39million). Edwards managed to secure this bargain price after he found out about Minamino’s cut-price release clause, and completed the deal before other teams got a hold of it. Regardless if Minamino proves to be a hit or miss, his value is still worth the price.

  • Edwards is also known for his ability to offload unwanted stars for decent prices. One of the most notable sales has to be Jordon Ibe and Dominic Solanke, both turned out to be great businesses for the club, with their sale raising £35million (RM188million) combined, despite both having less than 100 first-team appearances between them, and also cost next to nothing when they signed. That’s crazy right?

Of course there were a few hits and misses in the transfer window as FSG had to learn that football operated differently than their other business, baseball.

Some young and up-and-coming talents like Andy Carrol and Mario Balotteli, both failed miserably to perform up to the expected standards. In the end, they showed little to no return in terms of performance and were considered expensive flops.


Mo Salah joined Liverpool for £36.9million (RM198million), now he’s worth a staggering £108million (RM580 million), according to Transfermarkt.

Other later additions like Sadio Mané, Mohamed Salah, Andy Robertson and Gini Wijnaldum all proved to embody the new transfer policy adopted by FSG. These players came from ‘smaller’ clubs, with bags of untapped potential or had yet to reach their highest level. They also met the age criteria, appeared outstanding in comparison to their teammates, posted strong statistical and analytical performance data and seemed undervalued. If you ran the numbers in today’s transfer market, all four players would have higher values compared to what they were initially bought for.

Liverpool’s ability to execute these shrewd pieces of business is one of the reasons behind their success. Not only have Liverpool managed to bring in high quality players yielding relatively good returns, they’ve also handed out long-term contracts to many of their current crop of high performing players.

5. Branding and marketing is important! Successful brand positioning can help yield numbers

Beyond what’s on the pitch, the club’s success can also be traced back to their commercial glory and what’s being done off field to strengthen their brand identity.

Though Liverpool has a long enduring history stretching back 128 years, the club still needs to – as with most sporting brands – rely on commercial sales and branding to position them in better light with consumers and fans.

Earlier this year Liverpool announced Nike, the world’s leading footwear and apparel company, as its official kit supplier for the 2020-21 season, according to a statement. The lucrative multi-year partnership will see Nike manufacture and supply Liverpool FC’s playing, training and travel wear. Nike will also be outfitting the men’s, women’s and Academy squads, as well as coaching staff and Liverpool FC Foundation.

The contract with Nike is reported to be worth around £30million-a-year (RM161million) which is around £15million (RM80million) less than the bottom line earned from current kit sponsors New Balance. This partnership will be another big step for Liverpool in the aim of solidifying their reputation as one of the biggest and best clubs on the planet, both on and off the pitch.

Beyond that Goal reported that FSG managed to expand the club’s international reach thanks to securing a new retail partner in Malaysia, opening a new club shop in Thailand and establishing new selling channels on Amazon in the US, Canada and Germany. The club shared that they’ve managed to ship to over a record 190 countries world-wide for e-commerce deals.


A 2015 study by The London School of Marketing claims Liverpool has 580million “active” fans, second only to Manchester United’s 660million, according to the Liverpool Echo.

On the digital front, Liverpool are reaching out to more fans and supporters than ever before – the club’s global social media followers increased by 26% to nearly 70million and their official YouTube channel garnered 2.5million subscribers and is the most followed club in the Premier League.

On Twitter, where they are super active, has seen a spike in followers by 11% to 13.5million and reached 59million total engagements during the 2018-19 period – that’s about 6million more than any other Premier League club.

Liverpool also secured nine new commercial partners last year, including their first official training partnership with insurance company AXA. Other deals include Japanese food brand NH Foods, technology company Intel, Canadian telco Mitel, cyber security NordVPN, online trading platform TigerWit, US fashion label Levi’s and Swiss ski report Verbier.

Final thoughts – Liverpool will continue to see more growth as a brand

All in all, the future is bright for this football club, and the only way here is up.

For starters, at the end of last year, the man who led the transformation, manager Klopp, extended his Reds tenure until 2024, ensuring he will remain at the helm for a further four-and-a-half years, according to a statement by the club. Assistant managers Peter Krawietz and Pepijn Lijnders have also agreed deals to continue working collaboratively alongside Klopp.

This is very encouraging for the fans who have elevated Klopp to legendary level status- deservingly so too. His man management abilities and tactical prowess, backed by financially savvy owners and a strong backroom team, are some of the reasons why Klopp has been able to flourish at Anfield.

To top that off, Liverpool hope to unveil a brand-new state-of-the-art training complex worth £50million (RM269million) in the near future. Though it was slated to open its doors by the summer this year, it was postponed due to the coronavirus. It resumed construction this May.

We could also expect to see the proposed £60million (RM322 million) Anfield expansion to be completed by the summer of 2022. The expansion will add an additional 7,000-seats, bringing the capacity of one of the world’s most iconic football stadiums past the 60,000 mark.

Last but certainly not least, Liverpool are expected to offer extended and improved contracts to van Dijk, Alisson and Sadio Mane in order to fend off interest from other clubs.

The future looks bright for Liverpool. Sure coronavirus may have dampened their current transfer market plans and put a large dent in their finances this year, but they’ve been through much worse, as we have witnessed, and we are sure they’ll weather this storm too.

Apply for Standard Chartered’s Liverpool FC card as a memorabilia

Get a Liverpool Jersey when you pay your annual fee before 31 October 2020.

Prep for that mouth watering trophy lifting celebration on July 22 by applying for a Standard Chartered Liverpool FC card to add to your Liverpool memorabilia collection.

Minimum Monthly IncomeRM3,000/month
Interest Rate15%
Annual FeeRM175
CashbackEveryday 5%
Good ForCashback, Shopping

Apply with us now and get a free Xiaomi Induction Heating Rice Cooker 3L.

Promotion period ends July 31.

  • 5% Cashback for RM1,500 minimum monthly spend
  • 3% Cashback for RM800 minimum monthly spend & 2% for RM500 minimum monthly spend
  • Official LFC Home Shirt Redemption with Annual Fee payment from 1 November 2019
  • Petrol and insurance transactions are not applicable for cashback, but counts towards min. retail spend
  • Monthly Cashback capped at RM50
Click here to sign up
Read More

10 Simple Ways To Avoid Getting Scammed (And What To Do If You’re A Victim)

  • By CompareHero.my
  • July 8, 2020

From online scams to investment scams, scammers are still active and rampant, especially during the COVID-19 pandemic. Many scammers took advantage and made many Malaysians fall for different types of fraud schemes and scams. If you’ve become a victim, what can you do and where to report? Read more find out and learn how to avoid being scammed with these 10 tips.


Anyone can be a target, anyone can be a victim. 

Regardless of age, ethnicity, religion or background, anyone could be a casualty of fraud. From large investments to small ticket items online, scammers are anywhere and everywhere. 

In fact, fraud dates back to the year B.C. when a Greek merchant named Hegestratos took out a large insurance policy known as bottomry. Long story short, his plan failed and he drowned trying to escape his crew and passengers when they caught him in the deceptive act.

The only difference between a scammer back in the day or a few decades ago versus now is the technique of stealing and how it’s done. Online hackers and scammers combine old dirty tricks with technology to terrorize unsuspecting users. 

Here are 10 practical steps you can take to identify a scammer and know if you are being scammed. The best way to avoid fraud is through prevention, so let’s try to stay ahead of the game and be more vigilant!

1. Deal with individuals and entities who/that are registered/licensed under SC

Spot these imposters before they engage with you. Scammers often pretend to be someone you can trust or someone of authority like a government official, a family member, someone representing a charity etc. 

Don’t give out personal information and data or send money to any unexpected requests – be it via phone text, email or phone call, especially if you have a bad gut feeling about it. For more information on persons or entities registered under SC, click here. 

2. Ask questions and request important information – vet them through and through!

Scammers often bank on the fact that people either don’t ask the right information or are too lazy to do basic research before making a decision, whether it be a big investment or a simple online purchase. 

Just like any other big decisions in life such as purchasing a property or a car, choosing a career, getting married, etc. make sure you conduct thorough research on who you are dealing with, the individuals that make up the organization and its services and products. 

Thanks to technology, everyone can search up literally anything on the internet. Type in the entity or individual or piece of information you have, and pair it with words like “review” or “scam” to see if it’s associated with anything negative. If you have their phone numbers, Google it. 

3. Check with authorities before investing/depositing monies

Never ever deposit or wire money to any entity or organization that you are unsure of. Just like how you would never open a door to a stranger, you shouldn’t be giving out personal information easily like that as well. 

Check with BNM and the SC if you need to verify information on an individual or organization. For more information, visit BNM’s website and the SC’s website. 

4. Beware of Ponzi schemes

Essentially these are fraudulent investment schemes where the operators will take money from new investors to pay earlier or existing investors. 

The whole project will continue until it reaches a critical stage when there are not enough new investors to provide sufficient funds, subsequently the whole scheme collapses.

This trick often works with investors who don’t request for a detailed breakdown of how and where their money will be invested. 

The solution is to request as much information on the business as possible. They should be able to tell you how they plan to be profitable. 

5. Ask for certifications to prove authenticity 


Scam alerts help you be more aware of active scams and organizations that are fake.

Though people can falsify their credentials in today’s advanced world, having documentation helps solidify claims, and is always better than nothing. 

For instance, multi level-marketing (MLM) companies that sell stuff like water coolers, protein shakes, health products and cleaning supplies are all legal, though many may assume otherwise. What makes companies illegal is when they operate as a pyramid scheme, a model where commissions are given based on fees received from new recruits that are brought into the scheme. 

How do you verify if an MLM company is legal? Request for their Direct Selling Association Malaysia (DSAM) and Suruhanjaya Syarikat Malaysia (SSM) certificates. Check here for the full list of DSAM companies. 

6. Be skeptical of investment opportunities online and on social media

The rule of thumb is – if it sounds too good to be true, it’s probably not true.

If you’ve gotten yourself involved in an investment opportunity, always request everything in writing for an official black and white. The internet allows scammers to contact a wider pool of victims, so be wary of organizations or individuals that contact you out of the blue.

7. Mull over the decision to invest – don’t rush

When a deal seems lucrative or appealing, it may be tempting to make a decision right away, but this is where the trap usually comes in. 

Don’t be pressured into investing! Make an informed decision by examining all the facts and analyzing how you feel about it. 

8. Non-secure payment methods

Scammers will often ask you to make payments through non-secure methods such as money cheques and cryptocurrency like Bitcoin. Scammers also opt for wire, bank or international funds transfers. 

Non-secure methods are difficult to track and will make it difficult for you to recover your hard earned money. We found out that credit cards are one of the most secure payment methods. 

By the way, it wouldn’t hurt to check out the list of credit cards on our websites, especially if you are on the lookout for one. 

9. Be aware of the internet

Surf at your own risk – remind yourself to be extra careful of advertisements on social media or online. When using a public wifi, for example, consider these extra steps: 

  • Use a virtual private network aka VPN, which lets you encrypt your web traffic, allowing you to protect your browser sessions from hackers and the owners of the public network.

  • Refrain from accessing any personal information or data such as bank accounts, primary email accounts, shopping accounts etc. on a public network.

  • It is recommended to disable automatic connectivity when in public. This will prevent your device from any unsecure networks within your area.

  • Only visit webpages that use https over http. Websites that use https are encrypted to protect your data.

  • Always update your software and apps to protect your device from getting hacked and reduce the chances of identity theft, loss of information etc.

  • Connect to secure networks only – unsecure networks open the door for malicious people to view and send you stuff during your browsing session. Opt for secure networks or set up your own hotspot.

  • Always change your passwords – Update your passwords regularly and ensure you are using complex characters and number combinations that won’t be easily guessed.

10. Keep copies of all your documents and investments

Let’s say you’ve made an investment. What do you do now? First things first, make sure to have documentations of all your investments and transactions for your own record and it will help you solidify your claims. 

Related:  Don’t Become a Victim of Work-from-Home Scams

What to do if I get scammed? Here’s where to report scams in Malaysia

BNM advises that we take the following steps if we’ve been scammed: 

  • Lodge a police report
  • Then report to relevant enforcement agencies 
  • Keep all records and documentations – including crucial details of the persons/organizations involved: name, age, title, agency


For more information, you may directly contact the two BNM centres below: 

BNMTELELINK (Call Centre)
Tel.: 1-300-88-5465 (1-300-88-LINK)
Fax: 03-2174 1515
SMS to 15888: BNM TANYA [your report / query]
Email: bnmtelelink@bnm.gov.my
Operating Hours: 9.00 a.m. – 5.00 p.m. (Monday – Friday)

BNMLINK (Walk-in Centre)
Ground Floor, D Block,
Bank Negara Malaysia,
Jalan Dato’ Onn
50480 Kuala Lumpur
Operating Hours: 9.00 a.m. – 5.00 p.m. (Monday – Friday)

Okay, what else should I be aware of?

To be extra careful, we advise you check out this list of unauthorized companies and websites, a.k.a the infamous BNM scammer list, so you are aware of the types of entities to avoid. 

If you suspect there might be an ongoing scam, you can lodge a complaint on improper conduct, public scams or other irregularities to the SC here. 

Lastly, be on top of scam alerts and fraud and scam notices as and when by following these links on BNM. 

Final thoughts? You can’t stop scams, but you can be extra vigilant 

There’s no set formula or guarantee that you will never be scammed in life, but there are many things you can do – simple ones in fact – to help reduce the possibility of being a victim of fraud or scam. 

Everyone plays a role in the war against cybercrime, and you must play your own part by having a higher sense of accountability and responsibility. 

Remember to think twice before ever giving away any piece of personal information or data. 

Read also: 7 Types Of Shocking COVID-19 Scams All Malaysians Need To Be Aware Of

Read More

7 Types Of Shocking COVID-19 Scams All Malaysians Need To Be Aware Of

  • By CompareHero.my
  • July 3, 2020

Since the beginning of the Movement Control Order (MCO), many Malaysians have become victims of frauds and scams. Some of the scams include face mask scam, PPE fraud, scam calls, EPF scam, investment scam, Pos Malaysia scam and more. Read these 7 types of COVID-19 scams you need to be aware of so that you will not become a scammer’s next victim.


The COVID-19 pandemic has fundamentally changed the way we conduct our day to day, with many seeing significant changes to their routine as most people socialize, play and work indoors.

This shift – and higher dependency on technology – coupled with the uncertainty of the situation has invigorated predatory fraudsters to head online and take advantage of people’s vulnerability caused by financial and health stressors from the pandemic.

On top of that, the fear and desperation to stay safe from the virus has also led many to stock up on all necessary forms of personal protective equipment (PPE) like masks and gloves, as well as cleaning supplies – a paranoia that has created a fertile ground for fraudsters to thrive.

But crime isn’t only happening online, in some countries like the UK, as reported by BBC, it’s also happening on the ground as organising crimes are targeting vulnerable people at home and in the care sector.

Why have cybercrimes and scams been successful amid COVID-19?

The hike in COVID-19 themed phishing lures, high-risk fake domains and scams, KPMG states, is because of its simplicity. It also proves that cybercriminals are changing their modus operandi to instill fear and target individuals and businesses through different means.

“Right now, everyone is heavily reliant on their laptops or mobile phones to conduct their everyday needs such as online banking, shopping or donating to causes and charities. Criminals are not afraid to take advantage of that,” said Tan Kim Chuan, Head of Forensic at KPMG in Malaysia, in a statement.

To avoid unwanted cyber breach or financial loss, KPMG advises individuals and organizations to embed pragmatic remote-working security controls as immediate measures to deal with these threats.

The number of cybersecurity cases have increased by 82.5% (838 cases) during the Movement Control Order (MCO), from March 18 to April 7, compared to the same period in 2019, according to data by CyberSecurity Malaysia based on a report by The Star. Of this total, 18% (152 cases) involved local companies, while the rest were home users and others.

As Malaysia slowly weathers the COVID-19 storm, here are some of the most notable scams that have happened since the start of the MCO.

Types of COVID-19 scams

1. Online face mask scam, fraudulent sale of PPE, and fake drugs


The number of cybercrimes have increased during the MCO period. (Image source: The Star)

Predators have been taking advantage of an increasing demand in healthcare-related items by duping desperate and vulnerable buyers through many online scams.

The Star reported that two people in Penang lost RM41,920 in a scam when they tried purchasing 700 boxes of face masks online, but never got the masks despite being told they would receive it in three to seven days.

In both cases, the victims saw an advertisement on Facebook. “Since the demand for face masks is high, both decided to buy it online for their own use and also for their friends,” officer in charge of Seberang Prai Utara district Assistant Commissioner Noorzainy Mohd Noor said in a statement. Noorzainy said both victims made transactions into an account given by the suspect in stages.

Similarly, an online trader who wanted to make a bulk purchase of face masks lost RM108,300 after being duped by a non-existent supplier, Bernama reported. As of April 22, the victim had not yet received the goods, and her attempts to contact the suspect had been unsuccessful. The 34-year-old victim made her order from a woman in Penang through WhatsApp.

But it doesn’t end there, a Chinese national was scammed into giving RM600,000 and her passport for face masks, The Star reported. Things turned ugly when the victim questioned the fraudster, named Zhang Zheng Wei, after he failed to deliver the mask on the promised date (February 9), on top of threatening to kill her if she took the matter public.

As of March, 393 fraud cases involving the sale of face masks were reported nationwide, with losses amounting to RM1.1 million, said Deputy Inspector-General of Police Datuk Mazlan Mansor as a guest on the Malaysia Hari Ini programme on TV3.

A newer report by the Malay Mail states that Kuala Lumpur police have recorded 87 cases of fraudulent face mask sales totalling more than RM2.5 million since January. Kuala Lumpur police chief Datuk Seri Mazlan Lazim told reporters that these “sellers” can often be found via social media platforms such as Facebook, Instagram and other online sales platforms as well as via chat apps such as WhatsApp and WeChat.

COVID-19 has also led to an increase in online sales of unregistered and fake drugs, according to a report by the Edge. The high demand for health and personal care products has provided cyber criminals the perfect opportunity to strike on vulnerable Malaysians, said Health Director-General Datuk Dr Noor Hisham Abdullah.

“A total of 182 links to websites selling unregistered drugs for COVID-19 treatment have been filtered and blocked, while 556 notices were issued to e-commerce platforms to reduce the sale of unregistered products for the same purpose,” he said in a statement.

2. Bogus websites or social media posts


Anyone can create a website or post on social media – therefore it’s important to be extra cautious when surfing the internet. (Image source: Free Malaysia Today)

What may appear to be a heartwarming or harmless story on the surface, could just be a sham with deceptive motives and malicious intent. That’s exactly the case with a social media post that went viral, showing a Pos Malaysia delivery rider crying on the steps of a home after delivering a parcel during the pandemic.

It sparked an uproar on social media, with netizens demanding Pos Malaysia be held accountable for the situation and even asking them to give its staff a bonus for Hari Raya.

But a few days later Pos Malaysia debunked the case, and released a statement confirming that the Royal Malaysia Police (PDRM) had arrested a suspect who they believed was involved in the scheme, the Malay Mail reported.

If you would like to contribute to those affected by the pandemic, check out this comprehensive list of verified and legitimate Malaysian fundraisers that are supporting COVID-19 relief efforts, on Vulcan Post.

A hospital consultant in Kuantan lost RM63,465 from his savings account after sharing his personal banking account on a fake Bank Negara Malaysia website, the Edge reported.

The 60-year-old victim lost his money two days after he dealt with three men supposedly from the Malaysian Anti-Corruption Commission (MACC) and the PDRM.

The victim said the ‘officers’ were investigating him for failing to pay the income tax of a furniture company which was registered under his name.

Confused over the allegations, the victim was advised by a ‘Datuk’ to open a link on a website, supposedly from BNM, and fill up the information required for investigation purposes.

3. Investment scams


Get-rich-quick schemes are almost always fake because there’s no such thing as easy money!

Amanah Saham Nasional Bhd (ASNB) has urged Malaysians to be wary of a scam where the company’s logo is misused in a circulated message via Whatsapp. It’s been reported by the Star that the scammer dupes the public to deposit funds into a bogus investment scheme, all while guaranteeing great returns of investment within a short period.

Similarly, the Securities Commission Malaysia (SC) has recently cautioned the public of individuals or entities that are entrapping them into investing in unauthorized digital asset exchanges (DAX) operating in Malaysia, following an increase in the number of queries and complaints from the public.

“Investors who deal with unlicensed or unauthorized entities or individuals are exposed to various risks, including fraud and money laundering, and may not have access to legal recourse in the event of a dispute. The SC reminds investors to only trade with Recognized Market Operators (RMOs) that are registered and authorised by the SC,” they said in a statement.

Keep track of the situation by checking out the 12 companies operating without SC’s licence or authorization under its watch-list or Investor Alert. There are currently only three registered RMOs for DAX, namely Luno Malaysia Sdn Bhd, SINEGY Technologies (M) Sdn Bhd and Tokenize Technology (M) Sdn Bhd.

4. Immunisation scam and fake COVID-19 tests

The government has confirmed that it has ​never appointed any agency to carry out house to house immunization in the fight against COVID-19, according to a report by Bernama.

In a statement, the National Security Council advised the public to be cautious of these dangerous tactics by fraudsters and irresponsible parties.

“Do not allow anyone to enter your home for that purpose (immunization),” they said in a statement.

On a different but slightly similar note, Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob urged the public at a press conference to avoid purchasing or obtaining fake COVID-19 test reports as it will endanger themselves and others.

Suspects in connection with a syndicate selling such fake documents have been arrested, but the public were urged to remain vigilant.

5. Fake system tests

The central bank released a statement on social media to inform the public that they have not been selecting random people to beta test their app or system during the pandemic.

“Regardless of platform—online, phone call, sms, whatsapp etc—whenever you *have* to give personal info including banking details & password/PIN/TAC number—THAT is a SCAM. Stop before you lose your money,” according to the tweet from BNM.

6. Fake government aid texts

The Inland Revenue Board (LHDN) reminded citizens not to be fooled by scammers sending text messages claiming they are qualified for the Bantuan Prihatin Nasional, a government initiative to aid citizens affected by COVID-19.

In a Facebook post, the government agency said it will only send text messages from the numbers 62000 or 63833, emphasizing they would never request for personal details such as full names and banking information through text messages.

They also shared an example of a genuine text message notifying recipients if they qualify for BPN.

BPN recipients will be notified through emails from the address “no_reply@hasil.gov.my” and no further action is required from users who have received the email.

The fake text message requires recipients to reply with their bank details, and also promised payment credited within 24 hours.

7. Fraudulent withdrawal of Employee Provident Fund

In March, police opened 393 investigation papers (IPs) that incurred a total loss of RM3 million, these IPs involved online sales of face masks and fraudulent withdrawals of Employees Provident Fund (EPF) savings, according to a report by the New Straits Times.

This was off the heels of an announcement by Prime Minister Tan Sri Muhyiddin Yassin which allowed EPF contributors below the age of 55 to withdraw from their Account 2 as part of the i-Lestari Withdrawal facility, a government initiative to aid citizens affected by COVID-19.

“Scammers started making various ‘offers’ on social media platforms when the government had announced to the public that they can withdraw their EPF savings,” said Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob at a press conference.

“The scammers tricked victims into surrendering their identification cards and bank account details on the pretext of assisting them to withdraw their EPF savings. I would like to urge the public to please be careful. Do not believe everything you read on social media. If it involves EPF, please contact the respective organisations for clarification on the procedures,” he added.

What other types of scams in Malaysia should I be aware of?

Even before COVID-19, Malaysians were known to be gullible when it came to the internet. In a survey by Telenor Group which included countries like India, Singapore and Thailand, Malaysians were found to be the most vulnerable to internet scams.

We dive deep into other types of scams to be wary of in Malaysia in this piece – especially for millennials, those aged 30 and below who are considered most susceptible to online fraud, according to findings from the National Consumer Complaints Centre (NCCC).

But here’s a quick summary of the most common scams in Malaysia even before COVID-19, that you need to be aware of so you don’t become a victim and lose your money!

1. Illegal money lenders who claim to be ‘licensed’

These scammers include people or companies who illegally engage in money lending activities using fake licences purportedly issued by BNM.

Remember that if you are looking for a personal loan or financing alternatives, you are not required to pay any ‘deposit’ or ‘down payment’ in order to get the loan approved. By the way, if you are looking for personal loan options, CompareHero.my offers free comparison and application service for both personal loans and credit cards.

2. The EPF scam syndicate

Don’t trust individuals or corporations claiming to offer you access to quick cash via early withdrawals from your EPF fund. These EPF scam syndicates will then charge you a fee ranging from 30% to 60% in commission from the withdrawn amount.

The syndicate uses social media accounts, alongside the EPF logo to dupe victims and those desperate for cash. They also send false messages through social media, short messaging service (SMS) and WhatsApp.

Besides that EPF has also called out false SMS messages sent to EPF contributors, claiming their EPF account will be blocked unless they contact the number provided.

All official messages from EPF will display a five-digit short code as sender identification (ID), and the messages will not be sent to members from a personal mobile number.

3. The travel package scam

These cheap travel package scams usually appear on social media platforms. The prices will be unbelievably cheap – for instance, a package priced at RM200-RM250 for three nights. Unfortunately, the “agent” will usually disappear after the money has been deposited into the account.

Other infamous scams are the Umrah and Hajj packages. As a general rule of thumb, any Umrah package lower than RM5,000 is a red flag as legit packages usually stretch for 12 to 14 days, making it illogical for agents to offer packages priced lower than that amount and still be profitable. As for Hajj packages, it is advisable to go through Tabung Haji to avoid the potential of being scammed.

For legitimate travel deals, the MATTA (Malaysian Association of Tour and Travel Agents) travel fair is a good source which happens twice a year (might not happen this year because of the virus!) – travel agents there have been screened by MATTA.

You can also check with the Ministry of Tourism and Culture Malaysia to verify if the travel agent you are engaging is licensed.

4. The travel visa scam

One of the most popular and frequent visa scams is the Australian visa scam. The Australian Department of Home Affairs warns Malaysians to be cautious of false claims that Australian visas are allegedly for sale.

There are also fake facilitators who organise visas and flights to Australia for people to undertake paid work (such as fruit picking).

Malaysians who work in Australia and have breached their visa conditions, may be detained and removed. If you are aware of, or suspect, a scam in relation to Australian visas, please inform the Australian High Commission in Kuala Lumpur by sending an email to visakl@dfat.gov.au.

5. The land scam

Cases of forged land titles are quite common in Malaysia. Victims will realize they’ve been duped after discovering that the land title is under another person’s name despite having paid for the purchase of the land.

A few years ago, more than 10 victims had been duped into buying Malay reserve land at an unbelievably cheap price (RM60,000), but it turned out to be a scam because they were eventually ghosted by the company after a long period of silence, the Malay Mail reported. According to the report, this deceitful property company has scammed over 100 buyers.

Last year, eight victims realized they had been cheated of more than RM300,000 over a land scam when they found out that the land was occupied by others and the signed documents were fake, according to a report in The Star.

Some tips we can offer to keep yourself protected when shopping for property or land:

  • Make sure there is a black and white for everything.
  • Appoint a lawyer to protect your rights and interests, especially if you are not sure of the procedures in purchasing land or property. Don’t depend on the lawyers provided by the seller because they won’t necessarily protect your rights and interest fully.
  • Make sure the lot of land you want to purchase has an individual grant, don’t just fall for the trick of “site visit”. Insist on seeing a copy of the individual grant then get the grant checked at the land registry.
  • Check the zone which the land is in. For example, if you purchased a land with the intent to build a house make sure its under a residential zone. Similarly, you won’t be allowed to build houses in industrial zones.
  • DON’T put down your signature on any agreement or document before reading it thoroughly or have a lawyer explain it to you.
  • DON’T pay for any deposit before making the necessary checks and having it in black and white.
  • DON’T get pressured into agreeing – the individual or agent may try to create a sense of urgency especially if you have fears of losing the chance of owning the land. But resist this, and insist on going through the proper process.

6. The lottery scam

Like most other scams, this scam usually involves an individual or entity who will insist you deposit or transfer money to ‘receive’ the reward. And sadly, vulnerable figures like senior citizens, tend to be their easy targets.

Last year, a 75-year-old Ipoh woman lost nearly all of her savings (RM38,000) due to “winning a lottery ticket,” only to be ghosted by the scammers who approached her, according to a report by The Star. “After I handed over the money, they asked me to make copies of my identity card in Jalan Sultan Iskandar. When I arrived at one of the shops, I realized they had fled,” she said.

A few years back a 70-year-old man lost RM120,000 after he was tricked with a lottery scam, according to The Star. The victim had just left a Tabung Haji building.

The common thread for both scam cases and most others, according to the police, is that the scammers would work in pairs – a foreigner and a local – and convince the victims to help them claim a lottery prize.

7. The bank impersonator scam Malaysia

If you received a phone call claiming to be a bank officer who needs to verify your credit or debit card, hang up straight away. The callers will usually identify themselves as BNM representatives or a Bank employee.

What usually happens with these scammers?

  • They’ll tell their potential victims that their identification has been compromised or their card has been used.
  • The victims may be required to deposit a sum of cash into an account as a guarantee for an investigation and as a way to ‘verify their identification.’
  • Potential victims will also be asked for sensitive information such as their card number, full name, I/C number and the Card Verification Value (CVV) number.
  • Scammers will provide a number to call where a fake officer will greet the victims and ask for information relating to the victim’s banking and credit card accounts.
  • The fraudster would then instruct the victim to transfer money to a third-party account on the pretext of safeguarding the victim’s money as well as for investigation purposes.


NEVER give out any of your personal or banking information over the phone. Banks or BNM representatives will NEVER request for such sensitive information through phone calls, SMS or even e-mail. If you fear any compromise to your account, call your bank directly or go in person to a bank branch.

8. Casanova (African) scam

Women make up the majority of victims of African scams, The Star reports. From January to October 2019, 1,070 African scam cases out of a total of 1,303 cases involved women, according to Former Deputy Women, Family and Community Development Minister Hannah Yeoh.

Nigerian men are usually the reported transgressors, who upon entering Malaysia as students in local private colleges, prey on vulnerable women.

Here are some telltale signs of a typical African scam:

  • Men who befriend female victims through social media and then woos them into a “relationship”.
  • Communication will usually be restricted to calls, e-mails or instant messages only. They will avoid meeting you in person, or via video communication.
  • Scammers will tell victims they have sent cash or expensive gifts but it is stuck with the Customs Department, Immigration or a bank.
  • An individual claiming to be an authority will contact victims and ask for money to be banked into their personal bank account before the cash or gifts can be released to them. Not sure of the authenticity of an account? The PDRM has developed a portal to allow the public to check on mule accounts.
  • The “authority” will usually ask the victims for several collateral payments into their personal account before disappearing and being uncontactable; victims will never receive the items or cash.


Related: How To Get Your Money Back From Financial Scams

9. Investments scams

Though it can be tempting to get a hefty return of your money in a short span of time, reality is that’s never quite possible. Scammers use this tactic to prey on gullible Malaysians who may want to make a quick buck for whatever the reason.

Macau scam
An individual posing as police or bank officers will contact the victim and inform them that they are wanted for criminal offences such as money laundering. The scare tactic is intended to force the desperate and fearful victim to transfer money into the fraudsters’ account to erase their records immediately. Call BNM and don’t dial any of the given numbers. One of the most rampant cases in Malaysia, a total of 1,911 Macau scams were recorded from January to October 2019.

This week, a 90-year-old retiree lost RM3.83 million after the victim was believed to have been duped by a Macau scam syndicate, the NST reports.

In March, two individuals – a female health officer and an unemployed man – were cheated of RM71,600 in two separate cases and believed to be victims of Macau Scam syndicate members as well, the NST reports.

Mecca investment scam
Also known as Mecca Fund Global, syndicates will lure potential victims into a “Shariah-compliant” investment in Mecca, promising profits of up to 360% in a year (sounds crazy and impossible!)

Chicago Bond Scam
Operating under the name “Federal Reserve Chicago Bond,” it promises very high returns on investments. Over 7,000 victims have reported losses amounting to a total of RM90 million.

The job offer scam
Are you looking for a job? Be wary of high-paying jobs, especially if it is through social media.

In the past, victims were duped into being recruited to carry out Macau scams. The victims were promised salaries between RM5,000-RM7,000 via WeChat, but were told to meet the prospective employer at a coffee shop. “Nobody conducts job interviews for such high-paying jobs in coffee shops,” Federal Commercial Crimes Investigations Department deputy director Senior Asst Comm Mohd Sakri Arifin said in the report.

He also shared that the recruits were trained to impersonate police, BNM and Customs Department officers.

10. The work-from-home scam

Very relevant with the current circumstances, there are many fake job postings online. A big red flag is when you are asked to make a payment first, before getting the project you requested. These types of work scams will not advertise the upfront payment needed. Essentially this scam, like most others, starts with a request for payment upfront.

Final thoughts? Prevention is better than cure

Scammers and fraudsters will always exist in society regardless of the time and era. Though the advent of technology has made information and resources more accessible to the masses, it’s also a double-edged sword in a sense that, now more people could potentially access your private details in just a few clicks.

To avoid the unfortunate circumstances of financial loss and data breach, we too, must play our own part by having a higher sense of accountability and responsibility. We need to be more mindful of how we behave online and offline. Sometimes, this requires us to think five steps ahead.

Remember that though we can’t really stop scammers from hacking and stealing information, we can try, as hard as possible, to prevent ourselves from unnecessarily giving away precious information.

Read also: 10 simple ways to avoid getting scammed (and what to do if you’re a victim)

Read More

Compare the best deals in just one minute!

Credit Card

Loans

Travel Insurance

Car Insurance

Top Articles

Post Image
Latest Petrol Price for RON95, RON97 & Diesel in Malaysia
Post Image
T20, M40 And B40 Income Classifications In Malaysia
Post Image
Apakah Maksud Pengkelasan Pendapatan B40, M40 dan T20?
Post Image
Apa Anda Perlu Tahu Tentang Status Muflis
Post Image
50 Low Cost Franchises In Malaysia You Can Join Right Now