GEORGE TOWN: Education and professional status do not shield individuals from investment scams, which increasingly rely on psychological manipulation and social engineering rather than overt deception, a senior criminologist said.

Datuk Dr P. Sundramoorthy said a recent case involving a medical specialist who reportedly lost more than RM500,000 to a non-existent cryptocurrency investment illustrated a harsh reality, despite repeated public warnings and extensive media coverage.

“From a criminological perspective, scam victimisation is not simply the result of greed or ignorance.

“It is a complex interaction of psychological manipulation, social engineering and structural weaknesses in the digital environment,” he told the New Straits Times.

Sundramoorthy said investment scams continued to ensnare victims from all walks of life, including highly educated professionals accustomed to analytical and evidence-based thinking.

One of the key reasons such scams remain effective, he said, is the strategic use of social engineering to exploit trust.

“Modern scams are designed to appear legitimate. When an investment link is received via social media from someone the victim knows, the level of suspicion is immediately lowered.

“Trust, familiarity and perceived legitimacy play a crucial role in decision-making, particularly when scams are embedded within personal or professional networks.

“In these situations, individuals are more likely to suspend critical judgement, even when warning signs exist,” he added.

Sundramoorthy said emotional manipulation was another major factor, cautioning against the simplistic view that greed alone drives scam losses.

He said many scams exploit the fear of missing out, optimism about financial growth and anxiety over future security.

Cryptocurrency scams, in particular, are framed as innovative and time-sensitive opportunities, creating psychological pressure to act quickly.

Once emotions are triggered, he said, rational assessment often gives way to impulsive decision-making, even among professionals.

“Cognitive biases further heighten vulnerability. Overconfidence may lead educated individuals to believe they can distinguish genuine investments from scams, while confirmation bias reinforces this belief when scammers present fabricated profits or positive indicators.

“Authority bias also plays a role when scammers pose as investment experts, legal professionals or recovery agents, using official-sounding language and convincing documentation,” he said.

Sundramoorthy said the digital environment amplified these risks.

He said social media platforms facilitated rapid information sharing and created a false sense of legitimacy through visibility, repetition and perceived social proof.

“When investment opportunities appear popular or widely endorsed online, they seem more credible.

“At the same time, the blurred boundaries between social interaction and financial promotion make scams easier to spread unnoticed,” he said, highlighting the problem of secondary victimisation through recovery scams.

“After realising they have been cheated, victims often become desperate to recover their losses.

“Scammers exploit this vulnerability by posing as recovery agents or legal representatives, leading to further financial and psychological harm,” he explained.

Ultimately, Sundramoorthy said investment scams persist because they exploit human psychology, technological systems and regulatory gaps simultaneously.

“Victims are not irrational. They are targeted by increasingly sophisticated fraud networks operating in low-risk, high-reward environments.

“Addressing this issue requires moving beyond victim-blaming towards stronger regulation, platform accountability and public education that reflects how and why even well-educated individuals can be deceived in the digital age,” he said.

It was reported that online scams surged sharply last year, with losses reaching RM2 billion in the first nine months from 47,000 reports — a 94 per cent year-on-year increase.

The figures underscore the growing scale and sophistication of cyber-enabled fraud, which continues to outpace public awareness and enforcement efforts.

Younger demographics are particularly exposed, with Generation Z and millennials emerging as the most affected age groups, reflecting their higher engagement with digital platforms and online financial activities.

Investment scams have overtaken romance scams as the most prevalent form of fraud, typically luring victims with promises of extraordinary returns through fake apps and platforms. Phone scams, involving impersonation of authorities such as police, customs officers or utility providers, remain common, while online shopping and loan scams also account for significant financial losses.

This article first appeared on NST.