Specific Law Needed To Monitor, Regulate Online Donations - Police

Of late, online donation campaigns have become rather widespread, usually conducted by non-governmental organisations or individuals purportedly involved in raising funds for charity.

However, the absence of specific legislation in Malaysia to regulate and monitor such activities is making it difficult for any enforcement agency to investigate or take action against parties misappropriating public donations, reports Bernama in this final instalment of a three-part special report on the issue.

In October 2023, the media reported the success of the police in dismantling an online fraud syndicate that claimed it was collecting donations for three charitable organisations, leading to the arrest of 55 individuals.

The syndicate was reported to have operated for five years, soliciting donations from the public. Members of the syndicate were given a commission of 10 to 20 percent if they met their collection targets. However, the media reports could not disclose the total amount collected as the police needed to conduct further investigations.

The question is, how was this syndicate able to operate freely and openly for five years, potentially amassing millions of ringgit from the public?

Even though most religions encourage their followers to give alms and donate, don't ever be fooled by the fraud of an irresponsible donation embezzlement syndicate.

This year, the Malaysian Anti-Corruption Commission (MACC) prosecuted several individuals, including well-known influencers, for misappropriating public donations collected online.

It is likely that many others are also engaging in such fraudulent activities, given that modern technology facilitates instant money transfers which allow funds to change hands within seconds.

WIDESPREAD

The police, meanwhile, acknowledged the widespread prevalence of online fundraising activities, attributing it to the absence of specific legislation to regulate donations collected through online platforms.

Director of Bukit Aman’s Commercial Crime Investigation Department Datuk Seri Ramli Mohamed Yoosuf told Bernama one of the main challenges faced by the police in combating charity donation fraud is the “absence of specific laws to regulate online donation drives”.

Datuk Seri Ramli Mohamed Yoosuf.--BERNAMApix

He said currently, Malaysia only has the House-to-House and Street Collections Act 1947 (Act 200), which is limited to the physical collection of funds from house to house or premise to premise.

“Due to the absence of specific legislation for online fundraising, it is difficult to take enforcement action,” he said. 

Ironically, Act 200 was last reviewed in 1978 – before the advent of information and communication technologies.

“Based on the current situation, online fundraising activities would only be considered an offence if fundraisers collect donations in the name of a charity or organisation without the knowledge or consent of the entity concerned.

“If these charities or organisations file a police report, investigations will be conducted under Section 420/511 of the Penal Code,” he said, adding most of the cases reported to the police involved complaints lodged by non-governmental organisations (NGOs) or associations whose names were misused by irresponsible parties to collect donations.

Under Act 200, parties intending to conduct fundraising activities are required to obtain a permit or approval from the police and the respective State Islamic Religious Department. However, Bernama was informed by the Registrar of Societies Malaysia (RoS) that registered NGOs may collect funds from the public if their constitutions permit it.

This raises the question of who regulates such collections as RoS has made it clear that their role is limited to monitoring the activities of organisations through the annual reports submitted by them to RoS.

Crime analysts contacted by Bernama agreed that this approach creates vast opportunities for misappropriation and abuse to occur.

Ramli concurred, saying that from the perspective of the police, there is a need to enact specific legislation, along with a clear Standard Operating Procedure to regulate online fundraising activities, which would not only ensure transparency but also enable more comprehensive enforcement actions to be carried out.

SPEED UP ENACTMENT OF NEW LAW

Ramli also said given the current scenario, the enforcement of specific legislation is critical as Internet accessibility and information technology continue to expand, providing greater access for fundraisers to promote their fundraising campaigns to their target audiences.

“The generosity and goodwill of Malaysians, who are known for their charitable nature and willingness to help, have led to the proliferation of online fundraising platforms,” he said, adding the absence of specific laws and a regulatory body has fuelled the perpetuation of such activities.

A married couple of social media influencers believed to be involved in the embezzlement of donation collection money were recently remanded to assist in the investigation.

He also said in the absence of specific legislation, the public should remain vigilant and not easily fall prey to fraudulent fundraising activities by organisations or individuals.

“It is difficult to verify the legitimacy of an online fundraising activity as there are no specific procedures regulating these collections. However, the public can verify the authenticity of a fundraising campaign by checking with the charity or organisation (whose name is being used) before making any contribution,” he added.

CASES

On the number of complaints reported to the police over the last five years with regard to fraudulent fundraising activities, Ramli said between 2019 and 2023, the police investigated 85 cases of donation fraud nationwide, involving donations amounting to RM667,845.

The police recorded 32 such cases (involving RM409,396 in donations) in 2019; 22 cases (RM77,024) in 2020; and 14 cases (RM171,940) in 2021.

People need to be more careful with online fundraising scam syndicates.

Ramli said in 2022, five cases of donation fraud were reported involving donations of RM9,200, and in 2023, 12 such cases were recorded involving RM285.

From January to September 2024, 10 cases were reported, involving donations amounting to RM133,369.

Ramli explained these statistics pertain to two categories of donation fraud cases: the first involves cases uncovered by the police through the monitoring of suspicious fundraising activities, while the second consists of police reports filed by organisations, associations or charities whose names were used for fundraising without their knowledge.