By PAUL O’DONOGHUE, Senior Correspondent
SOCIAL media platforms play a key role in allowing scam compounds to target new victims, according to a ‘landmark’ new report from the FATF (Financial Action Task Force).
The report, which focused on practical approaches to disrupting these compounds, found that people from at least 80 jurisdictions have been identified working in scam compounds in Southeast Asia.
It said that many of these people working in scam compounds are themselves trafficking victims, with “an estimated 120,000 forced to carry out online scams in Myanmar alone”.
The FATF said that social media and new technologies such as AI have emerged as key enablers in this trend.
“Digitalisation increases the reach of scam networks and the exposure of potential victims,” it said.
“Widespread use of mobile devices, social media, messaging, online platforms and digital financial services enables scam networks to target victims remotely and operate across jurisdictions at scale.”
The FATF report also outlined the end-to-end illicit financial flow model for scam compounds, featuring seven distinct stages.
Scam stages
Social media features prominently in the first four, as the criminal networks running industrial scam compounds target both forced labour victims and potential scam targets.
Stages 1-3 are:
- Establish operations
- Recruit workers
- Acquire victims
Stage 4 is the ‘Payment Window’, when fraudsters execute the scam. The FATF report said that, in all four stages, criminals use “social media/messaging accounts”.
FATF President Giles Thomson also highlighted the impact of social media and new technology, saying: “With criminals weaponising AI and other technologies to intensify their scam operations, we need to urgently modernise and accelerate our response.
“This means focusing on dismantling the criminal networks behind scam compounds, working proactively with technology, social media and communications sectors to prevent and disrupt more scams before they happen, and quicker intervention to freeze and seize the proceeds of scams once they’ve happened.”
The findings come following reports from financial institutions such as Revolut, which have said that the vast majority of online scams now originate on social media platforms.
Tackling industrial fraud
The findings around social media came as part of the wider FATF report, which argued that countries should reframe how many tackle industrial scale fraud.
Instead of treating large-scale scams as a consumer protection issue, the FATF argued that law enforcement and the private sector must instead directly target the criminal networks running these scam empires.
Alongside social media, the report said that virtual assets are a “central money laundering channel”.
It found cases where dedicated over-the-counter exchange desks “operate inside scam compounds to facilitate virtual asset exchange and domestic fund transfers”.
“Instant payment platforms are also exploited,” the FATF said.
“Illicit funds can move from a victim’s account to an exit point from the financial system within 3–5 minutes [sometimes in as little as two minutes]. While victims take around 20 hours on average to realise that they have been scammed.”
It also warned about other new technologies, including:
- AI-enabled content
- Deepfakes
- Automation
“[These are] reducing costs for scam networks and helping them scale and speed up their operations, while making it increasingly difficult for victims to identify fraud attempts,” the FATF said.
FATF principles on scam compounds
To help combat scam compounds, the FATF report calls on countries to “combine downstream interventions with upstream disruption that targets the wider criminal infrastructure”.
“By identifying early signals such as fraudulent advertising, recruitment activity, malicious domains and suspicious phone numbers and telecom indicators, fraud can be detected even before a financial transaction occurs,” it said.
It also outlined new FATF principles on disrupting scam compounds.
These include:
- Target the wider criminal ecosystem: shifting focus from the physical compound to criminal leadership and controllers, recruitment and trafficking networks.
- Disrupt illicit financial flows end-to-end: disrupting the infrastructure and services that enable scams, while also stopping, tracing, freezing and recovering victim payments.
- Connect the networks: information sharing and cooperation between financial institutions, technology companies, telecommunications providers and authorities.
- Act at speed across borders: The first 24-72 hours after detecting a scam are critical for freezing funds, recovering assets, and preventing further losses.
- Put victims at the centre: ensuring investigations prioritise protection of both scam victims and persons trafficked or coerced into scam compounds.
- Adapt and focus on lasting impact: continuously updating operational approaches as scam operations change and modernise
The FATF said the report is “a first step” in the organisation’s broader anti-fraud roadmap.
“From now to February 2027 the FATF will be working with the public and private sectors to identify scalable solutions to address cyber-enabled fraud,” the FATF said.
We hope you enjoyed reading this article
If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!
