To Counter Online Scams and Fraud, Address Consumer Vulnerabilities

Scams and fraud have become among the most common crimes experienced by American citizens in recent years, with Gallup polls showing that fraud affected 15% of American households in 2023. According to the FBI’s Internet Crime Complaint Center (IC3), consumers in the United States reported nearly 860,000 complaints of cyber-enabled crime and fraud in 2024 with a record-setting loss of $16.6 billion. The past year saw a spike in cryptocurrency losses: $9.3 billion of the total losses was a result of cryptocurrency fraud, with $5.8 billion of that linked to cryptocurrency investment schemes similar to those run out of scam centers. Federal Trade Commission (FTC) data clearly shows an upward trend in overall fraud losses in the U.S. from year to year. As there is no centralized reporting platform for scams or fraud in the U.S. and many fraud victims do not report the crime at all, actual numbers of victims and losses are likely to be even higher than IC3, Gallup poll figures, and FTC statistics. 

According to FTC Data:

*Scams are considered a type of fraud.

Source: Consumer Sentinel | Tableau Public and Fraud Reports | Tableau Public

A scam is a specific type of fraud that involves deceiving individuals to trick them into giving up money, personal information, or assets. Scams typically use manipulative tactics or false promises to exploit victims, making them believe they are receiving something of value.

Perpetrators of scams are often based in scam centers located abroad, and over the last five years, scam centers in Southeast Asia’s lower Mekong region have increasingly been linked to victims in Western countries through various fraudulent schemes. These centers operating out of Cambodia, Laos, Myanmar, Thailand, and Vietnam have become hubs for international criminal organizations that remotely target individuals in wealthier nations such as the United States, Canada, Singapore, the United Kingdom, and Australia, where there is a larger pool of vulnerable individuals with financial insecurities, or who are unfamiliar with online scams. These operations are run remotely, allowing scammers to contact victims via phone calls, emails, or social media platforms. The perpetrators in Southeast Asia typically employ individuals (often under coercion or exploitation) to carry out these fraudulent activities.

Because these centers are located outside of the U.S. and often in countries with less stringent regulations regarding online fraud, it can be difficult for U.S. authorities to pursue the perpetrators effectively. The centers often operate with a high degree of anonymity, exploiting local enforcement that is either under-resourced, too overwhelmed to address the scale of the problem, or have limited cooperation with international law enforcement agencies. In some cases, the operations bring in significant illicit funding for the local economy and likely have cover from local governmental authorities or other powerful individuals. This allows the centers to target U.S. victims without fear of legal repercussions.

In general, scammers often rely on psychological manipulation, including fear tactics, emotional appeals, and social engineering to prey on the vulnerability and emotions of their victims. These tactics are designed to cloud the victim’s judgment, making them more susceptible to falling for a scam. Scams are often considered a particular risk for the elderly, as the largest numbers of both complaints and losses are from those aged 60 and above. The losses in this group are much higher than average losses, but IC3 data also indicates that this is a broad problem as the total amount of losses from those aged 40-59 in 2024 was nearly equal to those 60 and above.

Supply and demand can to some degree explain the dynamics between scammers and their victims. A persistent demand for quick financial gains, emotional connections, or solutions to personal problems leaves many individuals vulnerable to fraudulent schemes. This demand is often fueled by factors such as economic hardship, social or emotional isolation, apparent urgency of response, or a lack of awareness about warning signs of scams. Scammers exploit these vulnerabilities and the desire for wealth, love, or security by building false relationships to gain trust and manipulate the victim. Emotional isolation makes it harder for the victim to reach out for help or recognize that they are being exploited.

On the supply side, scammers or fraudsters provide deceptive services or opportunities that cater to the victims’ desires or needs, often utilizing texts, emails, and legitimate platforms, such as Facebook, LinkedIn, online shopping platforms, or dating websites, to connect and then offer fake investment opportunities, phony job offers, romance scams, or fraudulent products. The demand for quick, easy solutions — or a need for jobs or human connection — drives bad actors to supply scams, which then leads to more victims.

Reducing & Eliminating Vulnerabilities

Reducing demand through public education, awareness-raising campaigns, and addressing underlying systemic vulnerabilities is key to reducing the success rate of scams. Doing so requires a multifaceted and comprehensive approach that combines consumer education, technical efforts to block scammer access to consumers, stronger legal enforcement, disruption of financial incentives for scammers, and the provision of better economic opportunities and social support for vulnerable populations. By tackling scams from both the supply and demand sides, societies can reduce the prevalence of scams and protect consumers from falling victim to fraud. There are several strategies to help eliminate vulnerabilities to scams, from improving consumer education on scam tactics, adopting technical or regulatory approaches that can improve detection and prevention of scam outreach in the first place, and improving social support infrastructure, particularly for those who are emotionally or physically isolated or who may lack access to family members, friends, or legal and social support services that can help them recognize the signs of a scam. 

While the United States has seen significant losses, it is valuable to recognize that this is a shared problem and one that is exceptionally common in Southeast Asia as well. A survey by GASA indicates that 63% of those surveyed across the region had experienced a scam over the last year, and at least $23.6 billion was lost to scammers in that same time period. That is nearly a 50% increase on total US losses reported to the IC3 in 2024 and places a significant burden on victims given lower average incomes compared to the U.S. Scams are a drag on the regional economy, particularly on key industries like tourism and on digital sectors, and pose similar technical and capacity challenges to national authorities in major target countries like Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

This provides opportunities for the United States to collaborate with regional partners in identifying and collaborating on responses to the challenges. The Mekong-U.S. Partnership (MUSP) Track 1.5 Policy Dialogue on Countering Online Scam Operations in Bangkok, Thailand held in October 2024 explored a range of specific challenges and opportunities that the United States and other governments in target countries — as well as Southeast Asia — can take to counter online scam operations and stymie losses. These range from updating and improving relevant laws and regulations to building better reporting mechanisms and launching consumer education campaigns. The issue’s importance cannot be understated — the MUSP Track 1.5 Policy Dialogue on Digital Economy in August 2025 also included over 150 mentions of scam and fraud because the scale of the issue threatens the digital trust that underpins digital growth.

The full set of recommendations can be found online here for the 2024 Policy Dialogue on Countering Online Scams and here for the 2025 Policy Dialogue on Digital Economy, but some key recommendations for reducing vulnerability of citizens include:

• Ministries responsible for education and digital economy should strengthen digital literacy programs by boosting collaboration between key stakeholders, both in individual countries and across the region. While a crucial first line of defense is improving system security to minimize the number of scams that reach consumers, improving digital literacy can help reduce the success of scams.Digital platforms, tech companies, and finance companies should partner with on-the-ground educational institutions and NGOs to develop digital literacy training materials in local languages and with local context.
• Governments, NGOs, and other social service organizations must prioritize setting up infrastructure and investing in tools and resources that address both the financial and emotional vulnerabilities of consumers. This includes improving financial literacy, offering financial assistance, social support, and mental health services to individuals who are financially insecure, isolated, or experiencing emotional distress. Since scammers often exploit these vulnerabilities, tackling these root issues can help reduce the number of potential victims.
• Key organizations such as financial institutions, money service businesses, social media platforms, telecom companies, and search engines should take a more proactive and collaborative approach in preventing, detecting, responding, and removing scam content from their platforms. These organizations should collaborate with one another through information sharing initiatives, working together with governments, NGOs, law enforcement, and tech companies to prevent scams from reaching potential victims.
• If a company becomes aware of a trend in scams targeting its customers, it should publicly report it, warning customers and advising them on how to avoid falling for the scam. Major digital platforms including social media sites, payment providers, and digital banking services should be proactive about cautionary messages to consumers, identifying common scams in their sector. This transparency helps build trust with consumers and enables others to recognize similar scams.