What could happen when you lose your IC, a case of identity fraud successfully defended and a critical evaluation of the loan approval process practiced in some local finance companies.
One of my most common gratuitous advice is: Don’t lose your IC! (IC is short for ‘Identity Card’ and refers to the National Registration Card which every Malaysian has). This lesson comes from my civil legal aid cases. Most of my civil cases were identity thefts. The people who found my clients’ IC would use it to apply for credit cards, car loans or even loan agreements.
One of my first few cases was a young client who was being sued for a few thousand ringgit by a bank for credit card debts. He never applied for one. He wouldn’t qualify for one then either. He was a student. He did not work either. I wrote to the bank to explain the situation and request they withdraw the case. They were not interested and filed a summary judgment application against my client. This is a procedure to enter judgment against a defendant if the facts proving his liability is clear. If the court thinks it clear, then it will enter judgment against the defendant. If not, it will order the claim to be set down for trial.
In its summary judgment application the bank exhibited the documents supporting the application for a credit card. One of the documents was a pay slip indicating that my client was an accountant earning RM 5,000.00 a month. According to the employer’s letter he worked for more than a year. That meant he was 17 years old when he started working at the firm. The telephone numbers on the employer’s letter predictably did not work.
The bank understandably lost the application. Despite this they wanted to go for trial even though it was clear the application was a fraud. We prepared for trial but eventually I think the bank’s lawyers talked some sense to them and they withdrew the case.
A case I am particularly pleased about involved a student who was studying in Kelantan. He lost his IC in Kuala Lumpur a few years earlier when he came down for a visit. Several years later he received a curious notice. It was an insurance notification about a Mitsubishi Storm he supposedly bought. He was naturally perturbed since he only rode a motorbike and was engaged at the time in his studies. He was not in Kuala Lumpur either on the day the hire purchase agreement was purportedly signed.
He lodged a police report about the incident then came down to Kuala Lumpur to meet with the bank representatives to explain that he did not purchase the pick up truck. To his surprise, the finance company refused to withdraw the case. They claimed 3 finance company officers were certain he was the person who signed the agreement. Soon after the meeting the finance company commenced legal action.
Upon receiving the brief I wrote to the finance company appealing them to withdraw the case. They declined and filed a summary judgment application against my client. A careful scrutiny of the documents suggested that they were fraudulent as well. For example, my client had 2 different EPF numbers; the photo on ‘his’ driving license was lifted from his IC and a poor forgery; and the details on his pay slip were unconvincing – he began his employment on ’00/00/0000′. All this made it certain they would lose the application. And they did.
You may wonder why the bank didn’t just go straight to trial since this was not a clear cut case of liability. This is because bank officers like most people don’t like to go to court. So they try their luck with these applications. Now despite all these facts, the finance company insisted on going for trial. Although I was annoyed initially, I looked forward to the opportunity of grilling the hell out of the finance officers. For the trial, I brought the college administrator, his friend who was with him at the material time and a handwriting expert.
The crux of the case was over the identity of the person who signed the agreement. That was my difficulty – how was I supposed to impugn the identification by the finance company officers? As it turned out, an unrelated piece of evidence helped me break them down. According to their evidence my client came to sign the agreement together with a Chinese man. It was the presence of this Chinese man that proved their undoing. The rest of their evidence was directed at confirming my client’s identification and how they went about doing it.
My cross-examination of them focused on 3 areas. The first area was the people they met in their usual course of work. It turned out each of them saw anything between 400 – 600 customers a month. In a year it reached the thousands. They only saw them to sign the agreements. That on average took about 20 – 30 minutes to complete. They didn’t seriously compare the applicant with the photo in their IC. And about 7 years had lapsed since they allegedly saw my client at their office.
The second area was the description of the Chinese man that purportedly came in with my client and making them compare their descriptive memory between the two of them. Though they all did wonderfully with the alleged description of my client (because they had seen him at previous trial dates which were adjourned and because he turned up at their office to explain), they were dismal in their description of the Chinese man. This provided an excellent control to their description of my client and demonstrated their true identification ability – they couldn’t remember. The best they could muster about the Chinese man was chubby, big sized and short hair. With my client however they remembered him down to his clothes.
These two areas of cross-examination bolstered my submission that it was impossible for the officers to remember what my client looked like. It did not help their case that one of them let slip that they supposedly refreshed their memory from a CCTV recording, which they did not bring and so attracted a negative presumption from the court (i.e. if the CCTV were brought to court it would be prejudicial to the finance company). The Judge ruled in my client’s favour on this and we won the case.
The third area had to do with the supporting documents. I took the lead witness (the officer that recommended the loan for approval) through all the documents and pointed out the glaring errors in the supporting errors as describe above. Despite the shoddiness of the documents he insisted that the documents were ‘original’ simply because they had colour copies!
This line of questioning made me wonder: These officers were supposed to be competent at their job. How is it they could be fooled by this silly documentation? I spotted these discrepancies on my first pass simply because they were so glaring. They didn’t just stand out, they practically leaped at me and tugged at my beard. Did I mention that the officers got a commission for each successful application approved? So it is in their interest to recommend a loan for approval. It is a win-win situation all around. Applicant gets their loan, officer gets their incentive and finance company gets turnover.
I can easily imagine a scenario where a corrupt officer colludes with an ‘applicant’ to get a loan approved. I’m not saying this happened in my case, but this case demonstrated how vulnerable this system is to corruption. The applicant puts in bogus documents using someone else’s name. An officer recommends the loan for approval. HQ more often than not approves the loan (after all, the officer was on the front line and verifying the documents). The loan is drawn down to pay for the vehicle. It is released to the ‘applicant’. He disappears and sells the vehicle off splitting the proceeds with the officer. The loan will immediately be in default. Sometimes they’ll pay the first instalment to buy more time. The finance company initiates legal proceedings against the ‘applicant’ but against the person whose name he used. In this scenario, the 2 losing parties are locked in battle with each other – the finance company and the victim of identity fraud. Money, time and effort are wasted by both the innocent parties. Whereas the 2 parties who should be accountable are not even on record – the finance officer and the fraudster.
The finance company thankfully did not appeal against the decision. It would have been fun for me to do but in the larger picture, it would have been a real waste of time. Of course my client was put to great inconvenience in having to come down to Kuala Lumpur each time for the case when he was still in Kelantan, and to take time off from work to attend to the case. At least it ended well for him.
If you lose your IC, the National Registration Department recommends the following:
“The applicant is required to go to the NRD Counter without any document or the applicant can bring the following supporting documents, if any (original and copy):
Fahri Azzat has lost his IC several times in his lifetime but thankfully none of them were used for some fraudulent purpose. He thinks that the IC system is outmoded and that biometric measures should be used instead since they are less vulnerable to counterfeiting. He also wonders how the current numbering system for the IC can accommodate the growing Malaysian population but hasn’t the time to find out.