THE authorities have labelled it a scam saying that it goes against the interests of consumers.
But syndicates operating scratch-and-win contests in Malaysia are laughing all the way to the bank. These syndicates reap an annual profit of RM2 billion ($870m), reported Bernama.
Scratch-and-win syndicates, which have been operating in Malaysia for the last 15 years are now believed to be targetting Singaporeans too.
Last year, a special committee set up by the Johor Baru Malaysian and Chinese Association (MCA) launched a research into syndicates operating in the country.
According to Mr Kua Song Tuck, chairman of the Johor Baru MCA, the profit of RM2 billion was likely to be much higher as the syndicates' operations were very widespread.
WIDESPREAD OPERATIONS
In an exclusive interview with Bernama, Mr Kua said: 'The syndicates, who have hundreds of agents and companies operating using direct selling licences, are raking in thousands of Ringgit a day through the sales of their wares using the tactic.'
He cited the example of a scratch-and-win contest company in Johor Baru which rakes in up to RM50,000 daily through its 50 agents.
Mr Kua said: 'With each syndicate having hundreds of companies and agents, it is not impossible for them to make a million Ringgit in a day.'
He added practically every household in Malaysia would have been or will be approached by agents of the scams.
According to the MCA research, scratch-and-win syndicates in Malaysia were spearheaded by four different groups operating out of Penang. The kingpins of these groups are men who call themselves 'kings'. They are well-known in the Chinese community.
He told Bernama that these men 'are filthy rich ...They are also known for their generosity in making contributions for the construction of schools and others'.
In Johor Baru, it is believed that there are six direct selling companies who use the scratch-and-win scam to lure consumers to buy substandard goods.
Authorities say that many victims of these scams do not lodge reports with the police as they are embarrassed.
Malaysian Domestic Trade and Consumer Affairs Minister Datuk Shafie Apdal had banned scratch-and-win contests on 3 Dec this year, because he considered them harmful to consumers.
This article was first published in The New Paper, Dec 26, 2007.
