Crushing the scam farms: Southeast Asia’s ‘criminal service providers’

As we reported earlier in the week, there has been a proliferation of illicit operations, known as scam farms, following the COVID-19 pandemic, across Southeast Asia - including in the Philippines - where they have often operated alongside legal gambling businesses.

UNODC is supporting countries across the region to cooperate more closely to fight back against the influence of criminal networks.

Benedikt Hofmann, the UNODC Deputy Regional Representative for Southeast Asia and the Pacific, visited a scam farm in the Philippines that was raided in March this year. He took UN News’s Daniel Dickinson on a tour.

Benedikt Hofmann: Here in northern Philippines, just a few hours north of Manila, is an example of a scam farm of the type that exist in many parts of the Philippines and across Southeast Asia. We can see buildings where people work, cafeterias where they eat and dormitories for sleeping.

In the midst is one building that housed the gambling operation, which had been formally registered with the government and inspected by a regulator. But, what’s not visible to that regulator, at least on paper, are the buildings that are in between.

One of them I saw earlier, houses computers and work stations, previously staffed by Vietnamese workers running scams targeting the Vietnamese market. Another building is for Chinese-speaking workers, who conducted scams targeting the Chinese market.

There are houses like the one that I’m standing in here, where the people that control this compound – the bosses, as they call them – do business and where they relax by the pool with their families.

UN News: Is there anything that you’ve seen today which has surprised you?

Benedikt Hofmann: The scale and sophistication of the compound is surprising. This does not look very different from a well-established tech company. Some 700 people were discovered on this compound when it was raided in March, and that’s not as many as other compounds we know about.

The other surprising aspect is the contrast between the lives of the people who were forced often against their will to live and work here and the sheer scale of wealth of the people who were in charge of the compound.

UN News: How much freedom do the workers have?

The people who work here are basically fenced off from the outside world. All their daily necessities are met. There are restaurants, dormitories, barbershops and even a karaoke bar. So, people don’t actually have to leave and can stay here for months.

However, even if they wanted to leave, they could not, as we’ve heard from people who were rescued from these centres. Some have been tortured and been subjected to unimaginable violence on a daily basis as punishment for wanting to leave or for failing to reach their daily quota in terms of money scammed from victims. There’s a huge amount of human suffering on this compound.

There are multiple types of victims, the people who are being scammed around the world, but also the people who are trafficked here held against their will and who are exposed to violence.

UN News: Who is behind these massive operations?

Southeast Asia is the ground zero for the global scamming industry. Transnational organised criminal groups that are based in this region are masterminding these operations and profiting most from them.

They work with different actors, with people who control territory, for example, in the Mekong border areas of Myanmar, or they might work with local power structures.

UN News: What range of crimes are being committed here?

Many of the more established scam farms in the Mekong region, which borders Thailand, Laos and Myanmar, started out as casinos tied into the regional money laundering of the proceeds from drug trafficking and other criminal activity.

But there has been a significant evolution, especially during the COVID-19 pandemic, in which casinos have changed their business model and moved into the online space, especially scamming and cyberfraud.

They are essentially turning into criminal service providers by selling cybercrime, scamming and money laundering services, but also data harvesting and disinformation.

Technology, like generative artificial intelligence (AI), is evolving so quickly, and that will really change the way these places operate by creating new opportunities for the scammers to make money.

UN News: How concerned should we be about what’s happening now and what could happen in the future?

These scam farms are places of innovation in a way because they’re far ahead of other parts of the economy, and that really doesn’t bode well for the future.

AI expands the scope and the scale at which a scam farm can operate. You’re not going to need a thousand people to run scams on a text-based cell phone; you just need a well programmed application to do it for you.

That’s where the real threat for the future lies. It’s a great concern for us from the UNODC as it has potentially serious implications for people around the world.

UN News: How are countries responding?

There is a growing gap between the speed these technologies are developing and being adopted by organised crime networks and the responses that governments in the region have at their disposal to address these issues. It is a regional problem with global implications. These scam operations are still predominantly based in this region, however, we do see some small operations in places like South America and Africa.

This is an extremely complex issue. It is not possible for one country by itself to address it, not least because these operations, even if you address them in one place, will just move to another country where there is less enforcement pressure on them.

So, what is needed is a regional response, and UNODC can support that effort. We can bring countries together and help them to agree on priorities and strategies to fight organised crime.

UN News: How much political will is there to do that?

At the moment, we see a strong push in the region to cooperate on addressing this issue. The Philippines, as well as countries in the Mekong region and China, are working together, conducting joint operations, discussing priorities and exchanging information at a scale that in the past was not the case. That is very positive.

At the same time, we continue to see a law enforcement-focused response to these issues rather than a more strategic whole-of-government response. The more countries work together, share expertise and information, and the more countries in the region also receive support from countries elsewhere in the world and organizations like UNODC, the better they can be prepared to address this issue.

Getting ahead of this issue will be incredibly difficult. We have no illusions that it will take a very long time, time that we don’t have with this technological change.