Scammed Twice: The Hidden Victims Behind Southeast Asia’s Financial Scamming Industry
By now, many of us are familiar with tragic scamming losses. These might include 26-year-old Melburnian Anne, who met “Lucio” on Tinder and within a month had been scammed out of $46,000[1]. Or Anthony, a single dad from Sydney, who developed a relationship with “Michelle” on Instagram before eventually being scammed out of $240,850 over a few months[2].
Image: Stefan Czimmek/DW
Our tendency is to see Lucio and Michelle as the perpetrator in these crimes. But it is highly likely that the person at the other end of the keyboard is someone like Micah or George. Both Micah[3] and George[4] were scammed themselves – believing they were to work in a call centre, doing the usual call centre work, with normal pay and conditions, and freedom to come and go, stay and quit as they pleased. But in reality, they were trafficked into scam centres, and were forced, at times tortured, to be the front of an endless number of scams. This is slavery in the digital age.
Scam centres are now littered through parts of Southeast Asia – notably Myanmar, Cambodia and Laos. Often controlled by crime syndicates originating in China, many of the people who are conducting scams have been scammed and trafficked into the scam centre. Conditions are abhorrent: working for at least 15 hours a day[5], threat of electric shocks, beatings and torture[6], but most importantly – little hope of escape. Conservative estimates suggest some 400,000 working in scamming operations, with a significant portion of these people enslaved.
The size and scale, along with the pace of growth of scam centres, are startling. There are now major scam centres in Cambodia (Sihanoukville, Bavet, Poipet), Laos (Bokeo), and Myanmar (Myawaddy). Going back just a few years, these sites barely existed. Here are images of a scam centre known as KK Park over time:
Less than half a decade ago, KK Park was rice paddies and farming. Now it is a well-developed and still rapidly growing scam city. And in saying “city”, it is literally the size of Australia’s largest CBDs. Here is the footprint of KK Park seen over Sydney and Melbourne.
The scam industry is devastating at every point of its existence. We have already talked about the conservative number of people who are literally scam centre slaves. Financially, the total value of funds stolen through scamming by crime syndicates operating out of Southeast Asia was around US$64 billion in 2023, and that number has no doubt increased. In the communities and countries where scam centres are located, they make up a significant portion of GDP, but they also entrench regimes who receive large dividends as hosts, so local communities become both dependent on the scam industry and continue to be oppressed because of the scam industry’s operating model.
Disrupting the business model
Scam centres are dependent on a number of ‘supply chain’ elements for the business model to work. Host country legal and enforcement conditions are of course a key. Trafficked labour is critical to run at the scale that already exists. Digital and physical infrastructure, including power and connectivity (regularly via Starlink), are critical. Financial infrastructure and payment rails are necessary to facilitate scams. Disrupting any of these will have an effect, restricting any or all of these can change the game.
Having an Impact
There are good people fighting the good fight in combating trafficking and caring for trafficking victims. Some of the organisations that we are engaged with include the Blue Dragon Children’s Foundation, International Justice Mission, and the Global Counter-Trafficking Group.
Blue Dragon Children’s Foundation, based in Hanoi, has been rescuing trafficked Vietnamese children for 20 years. In recent years, they’ve adapted to a disturbing trend: children being taken across borders and sold into online scam centres. Blue Dragon does not just extract victims. They offer trauma counselling, education, legal aid, and support to rebuild lives. They also work with Vietnamese police to track down trafficking networks and raise awareness in vulnerable communities.
“We’ve rescued nearly 400 people from scam compounds. Dozens were children. Many were held for months, beaten, and forced to scam strangers overseas.”— Michael Brosowski, Founder, Blue Dragon Children’s Foundation
International Justice Mission (IJM) is a global organisation that protects people in poverty from violence. Their teams in Southeast Asia have been instrumental in cross-border operations, working with government agencies and foreign embassies to secure the release of trafficked workers, correctly identify them as victims of trafficking, repatriate them to their home countries, and secure convictions against their traffickers.
“Scamming is not just a financial and social threat to Australians, it is a personal safety threat to the likely hundreds of thousands of people who are being enslaved in this industry from dozens of countries around the world.”— David Braga, CEO, IJM Australia
The Global Counter-Trafficking Group (GCG) exists to protect vulnerable people from exploitation. Operating in countries such as Thailand, the Philippines, Indonesia, Vietnam, and Cambodia, GCG partners with law enforcement, NGOs, and the private sector to align national efforts, uplift frontline capabilities, and lead joint operations that dismantle exploitation networks and protect vulnerable communities.
“Every digital or crypto coin behind every scam has two tragic sides: the scammed and the trafficked labourer. Let’s not forget the latter while focussed on the former.” — Jacob Sarkodee, CEO, Global Counter-Trafficking Group
These organisations, and others like them, have had and continue to have a significant impact. But they need support. They all rely on donations and aid to support their programs. The policy shift away from foreign aid in the USA has had a strong negative effect on frontline work. These organisations all have targeted programs of work ready to go that would directly target scam centre trafficking, if funding is available.
In the face of this constantly adapting and evolving problem, these anti-trafficking NGOs are now also increasingly working together. They are driving local and cross border solutions, increasing coordination across sectors and increasing front-line investment to create interventions that weaken trafficking networks and protect vulnerable communities. In Australia, this has taken the form of the Australian International Counter Slavery Alliance (AICSA), with GCG, IJM and Blue Dragon all members.
We are calling for partners across banking, payments and fintech to actively get involved in working with organisations such as Blue Dragon, IJM and GCG in solving this challenge.
Take action
Financial institutions have made great strides in detecting scams, protecting customers, and restoring lost funds. But as the scale and sophistication of scam networks evolve, we need to match that evolution with a deeper kind of intervention. One that tackles the root system enabling fraud at an industrial scale. Trafficked labour is now a core part of the scam economy. If we want to reduce scams, we must help stop the trafficking that powers them.
That’s why we are calling for 10 or more financial institutions across Australia, the UK, the US, and Asia-Pacific to support the creation of a $5–10 million per year fund. The fund would support joint and targeted projects aligned with three clear goals:
- Disruption of trafficking supply chains feeding scam compounds
- Rescue and recovery of trafficked victims
- A measurable reduction in scams reaching the financial system
The benefits are both ethical and strategic:
- Fewer scams targeting your customers
- Reduced reputational and financial risk
- Demonstrated leadership on one of the most pressing humanitarian-financial issues of our time
This is a chance to lead with purpose, with impact, and with others who believe the industry can do more than protect. It can prevent. For more information, contact:
- Matt Sykes (matt.sykes@paymentsconsulting.com)
- David Lunt (david.lunt@paymentsconsulting.com)
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[2] https://www.abc.net.au/news/2022-11-07/pig-butchering-crypto-romance-investment-scams/101606644
[3] https://fightofmylifepodcast.com/escaping-scam-city
[5] https://www.unodc.org/roseap/uploads/documents/Publications/2023/TiP_for_FC_Summary_Policy_Brief.pdf
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Author: Matt Sykes, Director, Sydney and David Lunt, Technical Director, Melbourne, Payments Consulting Network
Matt is an experienced leader with some 30 years experience across financial services, payments, cash and consulting. Matt has developed comprehensive strategic frameworks for many organisations and executed strategy through organic and inorganic growth initiatives. Having most recently built a banking–focused fintech from scratch, his approach is focused on getting things completed. Matt is a chartered accountant and holds a PhD and an MBA from Macquarie Business School and a Bachelor of Business from UTS.
David has spent over 25 years working in the emerging payment technology space. He is globally recognised as a leader in payments combining a deep understanding of the payments industry with innovative technical expertise. Over his career, he has advised numerous FinTech startups, product vendors, high street retailers and global card schemes on how to adapt to emerging payment technologies and legislation.
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