Inside Southeast Asia's scam compounds – book review

In the summer of 2023, a then 23-year-old Chinese student received a call from what thought was the Chinese consulate in New Zealand, where she was studying. The woman was told they'd received a complaint that harassing texts were being sent from a phone number registered to her ID and was advised to file a police report. The call was then transferred to what she believed was the 'Chinese police department'. An alleged officer then informed her she was being investigated for money laundering and could avoid investigation if she travelled to Cambodia to cooperate as a witness. She was sent various official documents to corroborate the accusations.

After arriving in Cambodia, she was taken to a town near the border with Viet Nam where scammers videoed her being brutally tortured. Her family members were then sent the video and told they must pay a ransom for her release otherwise she would be sold to people in Myanmar. The woman was eventually rescued by Cambodian police after her family made contact with Chinese nationals living in the country.

The harrowing account is just one of many mentioned in Scam: Inside Southeast Asia's Cybercrime Compounds, co-authored by Ivan Franceschini, Ling Li and Mark Bo. The book, published last year, traces the rise of Southeast Asia's scam centres through documents, social media records and extensive interviews with those who have experienced the compounds firsthand.

According to Franceschini, Li and Bo, the compounds rely on a mass labour force – the bulk of whom themselves are scammed or coerced into such work – to carry out a vast range of highly sophisticated and convincing scams: pig butchering (where scammers contact people – referred to as 'pigs' – through social media, illegally sourced datasets or 'wrong number' messages and pose as rich or attractive romantic prospects); fish butchering (where scammers pose as recruiters offering people the chance to earn considerable sums through schemes if they can first provide a sizeable cryptocurrency downpayment); and through impersonating law enforcement officials requesting a deposit be made to a safe account.

While AI is making scams even more convincing, what also becomes clear is the extent to which scams rely on human vulnerability. As one former scammer told the authors, “The scam is about finding the weakness of a human being. The goal is to find out what you need the most and fill that gap... there is always some problem in one’s life, and they [the scammers] will take time to identify it, analyse it and provide the support accordingly.”

Scam centres often house thousands of people, with hundreds of different scam operations, dormitories and shared facilities

But it's those deceived into working for – or in many cases trafficked into – such scam centres who pay the heaviest price. Scam notes that while many freed from scam centres have degrees – the book even details an account of a man with a PhD from the Chinese Academy of Sciences forced to work in a Thai scam centre thinking he was taking a lucrative job with a Singaporean company – many of those labouring in scam centres are of the "three lows": low age, low income, and have low levels of education, factors that render them particularly susceptible to falling for scam compound recruitment tactics. The authors argue that scam centres have become prevalent in the past few years in large part because Covid-19 and the surge in unemployment acted as a catalyst.

Pathways into scam compounds are numerous: deceptive job ads promising high salaries posted on social media and in group chats, friends and relatives themselves coerced into recruiting people they know, as well as through professional brokers. Some of the authors' interviewees also recalled being recruited through people that befriended them through online gaming thinking they were taking jobs in a call centre. Based on the authors' findings, the majority of people who end up labouring in such compounds are recruited through an acquaintance. Once there, it's not uncommon for individuals to be sold between compounds, with Chinese speakers – often the prime targets of such scams – fetching a premium.

Once there, workers live in a system the authors term "compound capitalism", characterised by salaries contingent on hitting quotas, long hours carrying out predatory scams under assumed identities that "annihilate" their own, all while accruing debts for accessing the compound's services. These debts are often added to the ransom that families are charged with for their release. In such a system, the authors point out, scam centre workers are exploited both as labourers and consumers, transformed into tradeable commodities. “Ultimately, it is the work of many toiling in conditions akin to modern slavery that sustains the industry.”

High ransom fees prevent workers from leaving, but so do the fortress-like set ups of the compounds. Those interviewed describe compounds surrounded by five-metre-high walls topped with high voltage electricity cables, while armed guards patrol the perimeter. One interviewee, who was eventually rescued by law enforcement, recalled armed guards even beyond the walls at checkpoints every few hundred meters. 

Yet once out, survivors are often met with little public sympathy. Many refuse to believe scam centre labourers could end up in the compounds unwittingly, while others argue they are now culpable for scamming many out of thousands of dollars and should be held criminally liable.  As the authors convincingly illustrate, those forced to carry out scam operations expose the limitations of the victim-offender binary and notions of the perfect victim.

The other notion the authors take issue with is that such centres operate in total darkness. They are, rather, both "seen and unseen". While these compounds are often located in secluded locations in Cambodia, Thailand and Laos or war-torn Myanmar, they are huge physical structures, often made up of buildings housing hundreds of different scam operations, dormitories and shared facilities such as supermarkets and clinics. And although communities may have little visibility of what goes on beyond compound walls, most of them "stick out like sore thumbs in the surrounding landscape". Moreover, their large physical presence has transformed beachside towns like Sihanoukville – once romanticised in Cambodian pop culture – into hotbeds of cybercrime.

Beachside towns such as Sihanoukville have been transformed into hotbeds of cybercrime

Nor do scam compounds emerge in a power vacuum beyond the knowledge of their host state. Instead, while the proliferation of scam centres has been, at least in-part, enabled by regulatory voids, the authors paint a convincing picture of how such scam compounds operate in conjunction with local elites, cross-national criminal networks and even local communities. While prominent elites may finance and own the compounds, survivors have also reported that local police have direct lines of communication with the compounds, allowing managers time to respond before any action is taken. The authors note that Cambodian media has also done extensive coverage of local law enforcement's unwillingness to investigate the compounds.

Perhaps the starkest testament to how extensive such networks are, however, is that survivors recalled being fearful of local communities selling them back to the compounds after their release. As the book points out, scam compounds lead to a proliferation of service industry jobs – often in short supply – for those in the local community. In doing so, scam centres become pillars of the local economy, with locals vested in their continuation. Although the authors refrain from using the term, they describe what other researchers have dubbed the "scam state", highlighting the degree to which scam centres have become embedded in the political economy and in turn operate with impunity.

The other global shift that has made the emergence of a transnational industrial-scale cybercrime industry possible, the authors argue, is the economic rise of China and its byproduct: "Global China's underbelly" – the illicit industries that have profited off the rapid economic growth of mainland China, but also Taiwan, Hong Kong and parts of Southeast Asia.

Indeed, China, the home country of many of the victims as well as those involved in the illicit networks that help the industry function, has gone to considerable lengths to address the situation, particularly from 2023 onwards when domestic and global outcries over the issue began to ramp up. With such pervasive interests in keeping the industry afoot, however, the authors are not optimistic the industry will wind down any time soon.

Instead, one is left with the impression that cybercrime compounds might just be late capitalism nearing its logical extremity. 

The Foundation's Asia in Focus initiative publishes expert insights and analysis on issues across Asia, as well as New Zealand’s evolving relationship with the region.