Human Trafficking-fueled Fraud in Southeast Asia: A Socio-economic Perspective

By: Carolina Ghisoni

Photo credits: Hermes Rivera via Unsplash

Introduction

Online romance, cryptocurrency, and other scam operations have existed across continents for years, but have recently taken on a more troubling implication. In Southeast Asia, the COVID-19 pandemic led to the emergence of the new phenomenon of “human trafficking-fueled fraud”. Since 2020, criminal groups in the region have managed to illicitly recruit and traffic victims for forced criminality by exploiting their vulnerabilities and heightened online exposure. At this moment, at least 120,000 people across Myanmar and around 100,000 in Cambodia may be trapped in scam operations with connections to other criminal-owned enterprises in Laos, the Philippines, and Thailand. The expansion of this double-edged threat in the region reveals various socioeconomic consequences whose primary targets are those fraudulently recruited and scammed. 

How scam operations came to overlap with human trafficking in Southeast Asia

Online scam operations have a long history in Southeast Asia connected to the presence of casinos controlled by organised crime groups. The arrival of the COVID-19 pandemic has caused a convergence of these scamming activities with regional human trafficking rings. On the one hand, the COVID-19 closures led many casino owners to convert unused space into scamming compounds while leaving many migrant workers stranded and forced to work in scam centres. On the other hand, the pandemic response measures issued by several Southeast Asian governments restricted millions of people to their homes resulting in more online exposure and vulnerability to either online recruitment or defrauding schemes (e.g. financial scams). As countries reopened their borders between 2021 and 2022, criminal groups continued taking advantage of people’s socio economic distress, deceiving and recruiting them for their illicit operations. Consequently, a new phenomenon known as “human trafficking-fueled scams” emerged. 

Defining human trafficking-fueled scams and modus operandi

For a crime to constitute human trafficking, three factors must be present: the act, means, and purpose. The act is “the recruitment, transportation, transfer, harbouring or receipt of persons”. The means encompasses the use of threat, forms, other forms of coercion, abduction, fraud, deception, the abuse of power or a position of vulnerability to achieve control over an individual. The purpose of human trafficking is always exploitation which encompasses many forms e.g. forced slavery, prostitution, criminality etc. 

Individuals forced to work in scam compounds in Southeast Asia fall under the definition of trafficked persons. Victims are recruited to work in scam compounds via fraudulent professional advertisements which appear legitimate (involving various rounds of interviews, required tests etc.). Once the victim accepts a job offer, they are offered transportation to their new place of work and end up in scam sites where they are retained and controlled for an undefined time. This constitutes the “act” of trafficking in persons. Fraudulent job vacancies are advertised via social media platforms including Facebook, Instagram, and Tinder. Deceitful ads typically offer very attractive conditions such as high stipends, bonuses, and free accommodation. The use of deception to fraudulently recruit people is the “means” in this form of human trafficking. 

A 23-year-old from China who answered an ad for a position as a promoter of online games explains: “The job description was very convincing and clear. They [the criminal group] even paid for my flight and Covid-19 quarantine. But when I arrived for my first day at work, I discovered that I had been duped.” Like many others, the interviewee was locked up in a scamming compound in the city of  Sihanoukville, located Southwest of the capital Phnom Penh. Known as the “ground zero” of human trafficking and slavery, Sihanoukville hosts many scamming facilities, such as the Crown Industrial Park.

At the scamming compounds, individuals are subjected to threats, the use of force and other forms of coercion. Passports and mobile phones are confiscated from the victims to prevent escape or contact with friends and family. The humanitarian situation in those camps is dire, with a shortage in food, water and appropriate medical care, and degrading sanitary conditions.  Individuals are subjected to inhumane treatments when they fail to comply with orders or when they do not meet the scamming targets (fraud sales quotas). Mistreatments include being chained at a desk, beatings, humiliation, electrocution, and confinement. Inhuman forms of punishment such as sexual violence, gang rape, and human trafficking in the sex sector are common practice. 

Through human trafficking, people are mainly exploited to commit forced criminality. In Southeast Asia, human trafficking victims are coerced to perpetrate online fraud via fake gambling websites, cryptocurrency investment platforms, and romantic, and financial scams to defraud online users. This phenomenon results in various socioeconomic consequences for both victims of scams and those who are illegally recruited – against their will – to become complicit in scams.

The socio-economic impacts of human-trafficking fueled frauds on victims of scams and on individuals forced to work scam operations

The victims of these scams are mostly from Asia, Europe, North America, and Oceania. Exact information on the demographics of swindled victims is not readily available. Generally speaking, however, both adults (18-59) and elderly people (60+) seem vulnerable to financial frauds across countries, with specific generations being more exposed to particular risks than others. For example, in 2021 in the U.S., younger adults were over four times more likely than older adults to report a loss on an investment scam. 

Swindled victims primarily suffer from monetary loss. In the U.S. alone, Americans have lost $2.7 billion in scams from social media since 2021. Most of these reported losses are ascribed to investment scammers, followed by loss of capital as a result of love scams. Sconed victims also face loss of properties (e.g. houses) and likely incur extra costs from dealing with banks and law enforcement when trying to rescue their capital. Victims also deal with social issues such as loss of reputation, feelings of vulnerability, and feelings of isolation. At times, the initial feelings of embarrassment and shame coupled with exposure to social stigma and/or sudden abandonment by their “scammer” can develop into more serious emotional traumas and mental health issues, for instance, distress, anger, depression, and suicidal thoughts

A 35-year-old woman from Beijing working an office job describes her experience as a victim of a financial scammer from Southeast Asia: “First it was my savings, then he [the scammer] encouraged me to take loans from banks, and finally told me to download lending apps. […] Around December 2021, my scammer said he would come to Beijing to see me in January. Then we could think about buying a home together. [Of course that never occurred]. I borrowed money from nine online lenders, eventually I couldn’t borrow anymore because my credit rating was a mess. I lost about$100,000. That was the first time I ever saw my father crying. My family blamed me for being stupid. I broke down in tears.” 

Perhaps even more devastating is the impact on illegally recruited and trafficked victims who are forced to commit these frauds by their traffickers. These victims are mostly from Asia, Africa, South America, and the Middle East. Although their profiles vary, many of the victims are well-educated; they often have previous job experience and sometimes have graduate or post-graduate education.Furthermore, they are usually computer literate and multilingual. 

Trafficked victims often find themselves in a situation of debt bondage. Traffickers hold a fee over victims – claimed to be for travel costs, quarantine on arrival, and costs for training – which they have to pay to be liberated from scamming compounds. Debts further increase when victims are sold to other scam units and at times, victims’ families are required to pay a ransom to free their kidnapped loved ones. This puts victims and their families in a situation of heightened vulnerability and disadvantage. Usually, their options to seek out help are also minimal. As a consequence of the inhumane treatments and unsanitary conditions endured at scamming sites, trafficked victims often face very serious physical and mental health effects including post-traumatic stress disorder (PTSD), memory loss, sexually transmitted diseases, brain injuries, depression, and substance abuse. 

A 16-year-old woman – who was sold to a scamming compound in Cambodia in August 2021 and forced to perpetrate sexscams – explains: “At the scamming compound, they would beat people in front of everyone. The supervisor knew I couldn’t bring in money. He would be walking around with an electric baton and hit me as he walked past. It was really scary when he hit me. He would also touch us, but we’d push him away and we’d go to other people’s rooms to hide from him. I had trouble sleeping, I felt depressed.” Altogether, human trafficking-fueled scams in Southeast Asia decrease human development and constitute grave breaches of international human rights.

Efforts to countering human-trafficking fueled fraud in Southeast Asia

As the phenomenon of human-trafficking fueled fraud in Southeast Asia began to emerge, actors at different levels have attempted to respond to this new threat. In several of the countries where the human traffickers operate their scamming enterprises, national authorities have focused their attention on investigating and prosecuting recruitment agents who have trafficked individuals into scam compounds. For example, in April 2023, Taiwan prosecuted a group of criminals who had trafficked 88 victims for exploitation in scam sites in Cambodia. Regarding regional cooperation, government agencies and civil society have improved mutual information sharing on trafficking for forced criminality, and law enforcement agencies try to set up victim rescues and repatriation operations. Organisations like INTERPOL and the Bali Process, for example, have arranged workshops and meetings bringing together governments, international organisations, NGOs, and the private sector to foster information sharing on trends around this emerging form of human trafficking,encouraging a more coordinated counter-trafficking response. Lastly, in September 2023, ASEAN member states and the People’s Republic of China finalised a new strategic roadmap to address regional criminal scams. Nonetheless, despite the response of several key factors to forced criminality, challenges in the identification, protection, and repatriation of all victims remain. 

Conclusion

The arrival of the COVID-19 pandemic in Southeast Asia spurred changes in regional illicit activities resulting in the emergence of human trafficking-fueled fraud. This form of crime has huge socioeconomic consequences.Socioeconomic implications for the victims of these frauds may include monetary loss, social embarrassment, and emotional trauma as a consequence of the sudden evaporation of the relationship between a victim and his or her swindler. Even worse, illegally recruited and trafficked victims who are forced to commit these crimes may deal with serious physical and mental health conditions rising from debt bondage and situations of heightened vulnerability. To address this concerning phenomenon, various steps have been taken by key local and regional actors. Improvements in terms of investigation and prosecution mechanisms and multi-level coordination on countering these scams and trafficking operations have been made. Nevertheless, there is an urgent need for focus on the intricate process of identifying, safeguarding and repatriating the victims who are forced to work in these human-trafficking fuelled scams.

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