Scammers aren’t lone actors looking for an easy payday. Most scams are organized criminal enterprises spanning the globe, with a scale and sophistication few people are prepared for. Scams in the US are, at this point, attacks by organized crime on American citizens. We need to do more to stop them.
See America’s Scam Crisis with Ken Westbrook for a complete transcript of the Easy Prey podcast episode.
Ken Westbrook is the founder and CEO of Stop Scams Alliance, a nonprofit dedicated to reducing scams in the United States. Unlike the many groups focusing on consumer education and law enforcement partnerships, Stop Scams Alliance works to stop scams at the source, before they reach consumers. To do this, they facilitate public-private partnerships and cross-sector cooperation with different organizations and industries that scams affect. Ken himself spent over three decades in the CIA, the last ten years of which was doing IT, data analytics, and cybersecurity.
Ken was happily retired when, on Valentine’s Day 2023, his mother got a popup on her computer that led to her losing most of her life savings. He started looking into scams, not just for his mom, but for other moms who were scammed, too. He was horrified at what he found. So many people were being scammed, and the US wasn’t doing a good enough job as a nation to defend against them. He came out of retirement to create a nonprofit. The board of directors now contains a lot of former government officials who also decided to join in the fight.
So many people are being scammed … we’re not doing a good enough job as a nation to defend ourselves. – Ken Westbrook
Scams in the US are a Big Issue
The Stop Scams Alliance went to Gallup, the premier polling firm in the country, and did a poll in 2023 on scams in the US. They found that 8% of US adults said they’d been scammed in the last year. That amounts to 20 million Americans every year, about the population of Florida or New York. That’s 57,000 people per day. The number is enormous, and it’s going up every year.
The best data on scam increases comes from the FBI and FTC. The FBI relies on reports from victims. In just reported losses, they found a 33% increase from 2023 to 2024 and a 20-fold increase over the last ten years. Terms like “skyrocket” are appropriate here.
An article in The Economist magazine recently called it “Scam, Inc.” because scams have become a worldwide trillion-dollar enterprise. Scam operations are just like businesses, with revenues to go with it. And often, they’re run like businesses. Scammers have HR, onboarding, IT departments, payment systems, and more, just like a regular business. And they’re making so much money.
Scams as a Business
Scamming as a business started around 2018. Instability in Myanmar and Southeast Aisa led to a lot of Chinese criminal gangs setting up casinos and shifting to scamming operations. They got a boost during covid. People were economically desperate, so it was easy to get people to join. Some joined voluntarily, but in some cases, they kidnapped people and forced them to scam.
Though it started in Myanmar, Cambodia, and Laos, these scam camps are expanding around the world. Think tanks have reported them in Ghana, Peru, and Mexico. The US Treasury Department put out a report last year that some of the drug cartels in Mexico are starting to scam Americans, especially with timeshare scams. They use the money they steal from these scams to produce and distribute more drugs. We’re now seeing transnational organized crime that deals in drugs and human trafficking increasingly deal in scams to bring in a little more profit.
How Other Countries are Handling Scams
Scams aren’t just a US problem. The Chinese crime gangs in Southeast Asia started off by scamming Chinese citizens. Eventually, China started to warn people and crack down on scam compounds. According to some of the reports Ken has seen, these scammers are now trying to recruit (or kidnap) more English speakers to better target people in the US, Australia, and the UK.
Around 2021, the British and Australian governments saw what was coming and started preparing to handle it. In 2022, the British government appointed a former member of parliament as the Scam Czar attached to the British Home Office and issued a national strategy. The Australian government also appointed a Scam Czar in the Treasury Department. In both cases, they had someone in charge of fraud policy to develop a strategy. The governments were paying attention.
Importantly, these governments also started developing public-private partnerships to get the government working with the tech community. Scams are a complex problem that involve industries including technology, telecommunications, social media, and banking. Fighting them requires working across industry lines. This enabled them to put some authentication measures in place to help people discern legitimate from fraudulent communications in phone calls, texts, and ads, too.
Scams are a complex problem that involve … the tech community, also telecom, social media, also the banking community. You have to work together across these industry lines. – Ken Westbrook
Authentication to Fight Scams
One of the big challenges with scams is impersonation. You think you’re talking to someone legitimate and you’re really talking to a scammer. The top scams right now are fake investment scams, business email compromise, and the tech support scam that got Ken’s mom. These are all scammers impersonating someone or something legitimate to trick you into sending money.
Google now requires financial ads placed in seventeen countries around the world to be on a government-sponsored whitelist of authenticated businesses. Meta does this in four countries. None of these countries are the US. There might be a lesson there – other countries are finding value in authenticating ads, especially financial ads.
Scammers love to get people on the phone because it’s easier to create urgency. Now in nineteen countries, phone companies block all international calls spoofing domestic numbers. Some other countries allow opting out of international calls altogether, others label them as foreign so people know before they answer. Three countries currently do authenticated text messages so you can tell if you’re really getting a text from your bank, and the idea of authenticated texts is taking off around the world.
We’re going to have to start putting authentication measures in place so that we have better confidence in whom we’re dealing with. – Ken Westbrook
There are a lot of hurdles to these scam protection and authentication tools happening in the US. One big reason is that we have a lot more banks and phone carriers than other countries do, which makes it more complicated. Our free enterprise system also allows for even very small banks and carriers, which tend not to have the money for good security. The economic system allows small businesses to flourish, but we pay the price in security.
Why It’s Working in Other Countries
Measuring scams isn’t easy. Different countries do it different ways, and it’s hard to get good comparable data. But scams in Australia are down 35% since 2022, while scams in the US are up 61% in the same period. In the UK, they’ve been flat for the past couple of years. The UK and Australia do seem to have found ways to reduce that increase. And there’s three main reasons for that.
Reason 1: Someone’s In Charge
We’re at war with organized crime gangs using tech to attack us over our phones and computers. And these gangs believe it is a ware. The Economist interviewed someone who was at a scam camp in Myanmar, and he described how the scammers begin their day. Everyone gathers in a room, and a crime boss comes in and leads them in a chant that goes, “Cripple the economies of the US and Europe. This is World War III.”
We are at war with transnational organized crime gangs who are using cyber-enabled means to attack us over your phone and over your computer. – Ken Westbrook
It’s an economic war, and they’re attacking with scams. If we’re under attack, we need to have a general and a war plan. The UK and Australia have that. In the US, according to the General Accountability Office, there’s nobody in charge of fraud policy. A recent survey showed that there are thirteen different US agencies involved in scams, and no national strategy to fight it. To deal with it, we need to have a strategy and someone in charge.
Reason 2: Centralized Data
The UK and Australia, and now seven additional countries, have national anti-scam centers. These centers centralize data from banks, telecommunications companies, victims, and others to get a better threat intel picture. It works just like any corporate cybersecurity. They get threat intelligence to identify attacks, then are able to move faster and shut them down as they see them.
Nine countries have figured this out. If you treat scams like a cybersecurity problem, create centralized threat intelligence, and learn to identify and stop it, you can have some success.
Reason 3: Better Authentication Practices
To illustrate this, Ken likes to tell the story of fake websites. If you look at the FBI data, the top scam when it comes to dollar amount lost is fake investments. Often people are tricked into making a fake cryptocurrency investment. Scammers manipulate the fake site so it looks like victims are making a lot of money, prompting victims to invest more. Once you’ve put all your money in, they take it all. Scammers call this “pig butchering.”
Today, Australia will take down 20 of these sites. They take down 1,300 of them a week, and have taken down over 10,000 since they started doing it. And investment scams are down significantly in Australia. The UK has a similar system. It’s done by the government arm of GCHQ, the equivalent of our NSA.
The US doesn’t have a system for dealing with these scams. They don’t have the threat intel to know about them in the first place, and when they do, there isn’t a process to take them down quickly. The UK and Australia are focused on finding these sites and shutting them down quickly. This does a lot to protect their citizens. If the US wants to stop scams, we need better authentication processes to make sure we can tell the website, phone call, text message, or ad are legitimate.
Law Enforcement is Overwhelmed
Ken doesn’t want to blame law enforcement for any of this. He’s spoken to many of them, and they’re doing their best under a tsunami of scam cases. San Diego is one of the best jurisdictions in the country for dealing with scams, but according to the District Attorney, they can only investigate about 0.1% of cases they receive. The FBI’s rate of investigation is about the same.
As a nation, the US has to look at how to raise defenses against scams. The threat is only going to get worse. AI is already making it hard to know who you’re really talking to, and that’s only going to get harder. The US is increasingly adopting crypto and fast payment systems, both of which are convenient but which also let criminals evade seizure more quickly. And the UK and Australia are raising their defenses, and criminals love to go after easier targets.
As a nation, we have to really start looking at how do we raise our defenses against a transnational organized crime threat that’s only going to get worse and worse and worse. – Ken Westbrook
Criminals have noticed bank authentication practices are increasing around the world, and they are targeting the US more because it’s easier for them. We need to raise our defenses in tech, in social media, in telecommunications, in banking, and across the board. And consumers need more education on sophisticated threats. It’s an all-hands-on-deck situation as a society to fight this.
Scams Are Attacks
In the case of Ken’s mom, she visited an innocuous website, and a pop-up appeared. It was an advertisement, but it looked like a warning message. It said that her computer was locked to stop illegal activity and she should call a phone number. When she called, they convinced her that she was talking to Microsoft, and told her that her computer had been hacked. To protect her money, they convinced her to buy gift cards and send cashier’s checks. A bank clerk eventually proved to her it wasn’t real, but only after she lost most of her life savings.
When she told Ken, the first thing he told her was that it wasn’t her fault. She had been attacked by organized criminals. Too many families blame the victims for being stupid – they don’t realize it’s an attack. If you’ve gotten a toll road scam text, you’ve been attacked. If you’ve gotten a message that you have a ticket from the DMV, you’ve been attacked by cybercriminals. When you phrase it that way, the response is different.
Some of the criminals are in the US, especially the money mules. These people help scammers collect the money and launder it. But the kingpins are mostly overseas. Not only are 21 million Americans getting scammed each year, that money is going out of our economy and going overseas to fund transnational organized crime. It supports human trafficking, drug running, slavery, and even terrorism in some cases. That’s not a case of someone being stupid and falling for an obvious trick. It’s a sophisticated attack.
Not only are 21 million Americans being scammed each year … these dollars are leaving our economy and they’re going overseas to fund more transnational organized crime. – Ken Westbrook
It’s Not Just Old People
One common misconception is that we’re going to age out of the scam problem. The US Congress phrased scams as an elderly issue. A lot of books talk about elder fraud. The Department of Justice and the FBI both put out reports on elder fraud. People assume it’s mainly an old person thing because older people are technologically inept or have diminished mental capacity.
But many surveys, including the one Stop Scams Alliance did with Gallup in 2023, show that people under 50 are reporting being scam victims at twice the rate of older people. The number one scam by dollar loss is fake crypto investments, and young people are sucked into that just as much as old people.
But it’s also important to protect our elderly population. Young people fall for scams more often, but older people often lose more money, and at a stage of life where they can’t earn it back. And some scammers do target old people specifically. Using geofencing and fingerprinting computers can make them pretty confident they’re targeting an older person.
Scammers still target young people, but they target them differently. Advertisers are smart and getting better at microtargeting for ads. Criminals are studying closely and using the same techniques to microtarget victims.
What Individuals can Do
Stopping scams in the US at the root will take more than just individual action. But right now, it’s important for individual citizens to be aware of threats. Observe the FBI’s public service announcements. Pay attention to the main threats and how to deal with them.
Links can’t be trusted – Ken advises not clicking links at all because you really can’t know where they’re taking you. Scams that may not look like big deals can be doing more than you expect, too. The toll road scam isn’t just stealing your $10 for the fake toll. It’s convincing you to put in your bank info and steal a lot more than $10 out of your bank. That link can do more damage than you expect.
Be very wary if you get a communication from someone you didn’t expect. Whether it’s a phone call, text message, or anything else, if you didn’t expect it, you have to assume it’s not legitimate. There are a lot of stories now of the grandparent scam, where someone on the phone pretends to be a grandchild needing financial help. But it’s very easy to clone a voice to sound just like your grandkid. We’re at a stage where you just can’t trust any interaction you didn’t start. We won’t be able to know until we have better processes to authenticate.
Learn more about Stop Scams Alliance on their website, stopscamsalliance.org. Ken Westbrook has written five op-eds for major papers and three statements for the record for Congress, which he encourages you to read for more information. You can also contact him through the Stop Scams Alliance website.
