Fraud At Scale: Inside the Shadow Industry of Scam Centers

Scam centers (or scam factories) are transnational criminal operations where organized groups run industrial-scale fraud schemes – often under the radar of local law enforcement. These centers are frequently located in regions with limited oversight, such as parts of Southeast Asia, West Africa, and Eastern Europe. The people working in these scam centers are many times victims of human trafficking themselves. They are offered promises of high-paying jobs but then trapped, exploited, and forced to operate 24/7 scam operations by their criminal bosses.
 

Inside the Engine Room: How Scam Centers Execute Their Fraud

Scam centers are organized, disciplined, and ruthlessly efficient operations that function more like call centers than street-level fraud rings. Behind high walls or guarded compounds, trafficked workers are forced into regimented shifts where they follow scripts, adopt fake personas, and use psychological manipulation to exploit victims online.

Scammers' methods include:

• Impersonation: Scammers sometimes use deepfake technology to fabricate images or alter their voice to impersonate government officials, police officers, celebrities, and family members of their American victims. Scammers also spoof phone numbers to make calls look like they are coming from someone the victim trusts.
• Pig-butchering: Scammers reach out with what appears to be a "wrong number" text message. They "fatten up" victims by creating an emotional connection over weeks or months, often luring victims to additional platforms like apps or websites that look legitimate. Then, scammers "butcher them," by stealing their money.
• Romance scams: Scammers build an emotional connection with their victims by sharing heartfelt stories or sending fake photos, developing trust, and creating a personal relationship. Victims end up sending money directly to the criminal posing as a love interest.

It's Not About the Payment Method. It’s About the Criminal Infrastructure.

While much public attention has focused on the means of money movement, the real threat lies upstream: the scam operations exploiting human beings to carry out mass fraud. Cracking down on the point of payment alone is like trying to stop drug trafficking by regulating handoffs – it misses the factories producing the product and the criminal networks distributing it.

• In the meantime, these scam centers continue to operate with impunity. $75 billion has been lost globally to scam centers through pig butchering, a foreign scam center strategy, since 2020.

Squeeze the Source: Pressure Abroad, Unity At Home

Stopping the scam center epidemic requires coordinated pressure on the governments that allow these operations to thrive. The United States must use every diplomatic and economic lever to compel foreign partners to shut them down, prosecute the organizers, and protect trafficking victims.

At the same time, government, tech companies, financial institutions, and telecom providers must come together to cut off these criminal networks. Fragmented efforts won’t solve a problem this complex – only unified actions, both internationally and across industry, will begin to dismantle the infrastructure enabling these scams to flourish.

The Threat Doesn’t Start Where You Think It Does

Fraud and scams are increasing in both sophistication and scale, but they don’t begin on payments platforms like Zelle®. Instead, they often start with manipulative tactics from criminals, both foreign and domestic, who exploit Americans long before any money changes hands. These scams originate through phone calls, text messages, or online marketplace ads that mislead people into sending money under false pretenses.

The growing availability of generative AI is also making impersonation scams even more dangerous, enabling fraudsters to convincingly mimic the voices and identities of loved ones or trusted authorities.
 

How Zelle Protects Consumers

Since the launch of Zelle more than 99.9% of all transactions have been completed without a report of fraud or scam. We’ve continued to improve our fraud and scam defenses, and today more than 99.98% of transactions are completed without any report of scam or fraud.

Our participating financial institutions must meet the highest standards when protecting consumers. Zelle requires all participating financial institutions:

• Use authentication and enrollment controls, which may include (but are not limited to) two-factor authentication, biometric data, encrypted identity verification data, and real-time monitoring of enrollment tokens.
• Utilize data-driven technology for real-time identification of potential bad actors, allowing financial institutions to intercept and stop potentially high-risk transactions.
• Send in-app alerts that help protect consumers from scams. Every year, millions of in-app alerts are sent to consumers before they send a payment.
• Fully reimburse customers for any instance of confirmed fraud after a reasonable investigation, surpassing the requirements of the Electronic Fund Transfer Act (EFTA) and Regulation E. Zelle also goes above and beyond what is required by law and requires reimbursement for customers for certain qualifying imposter scams where the customer authorized the transaction.

Empowering Consumers to Stay Safe

While we continue to invest in technology and policies to protect consumers, below are a few actions everyone can take to reduce their risk of falling for a fraud or scam:

• Verify the Recipient: Only send money to someone you know, trust, and can confirm their identity. Once you approve sending the funds, the money leaves your account and is often unrecoverable.
• Don’t Trust Caller ID: Scammers can spoof a legitimate phone number by altering caller ID.
• Wait and Validate: Scammers will try to rush you into acting, so you won’t take time to stop, think, and verify facts.
• When In Doubt, Stop and Get Help: If you are uncomfortable with a request received by a phone call or text that you didn’t initiate, don’t respond and hang up immediately. Contact the company using legitimate sources.

If you believe that you’ve been a victim of a fraud or scam, you should:

• Contact Your Bank or Credit Union: They are required by law to investigate reports of fraud or scam.
• Alert the Federal Trade Commission (FTC): Call the FTC’s Fraud Victim Assistance Department at (877) 438-4337. You can also submit a fraud report or identity theft report.

Working Together To Stop Fraud and Scams at the Source

Stopping criminals from targeting individuals requires collaboration across industries, including government, social media, telecommunications, and financial services. No single sector can solve this problem alone.

To address this growing threat, we strongly support bipartisan legislation like the Task Force for Recognizing and Averting Payment Scams (TRAPS) Act, which would create a dedicated federal taskforce to target and disrupt criminal networks that are exploiting American consumers. By working together across industries and with lawmakers, we can build a stronger, safer digital payments environment for everyone.

Social Media: A Scammers Playground

Before a scam ever reaches your wallet, it often starts with a post, a message, or a friend request. Social media platforms make it easy for scammers to blend in – posing as trusted brands, influencers, or even people you know. The goal: earn your trust before you even realize what’s happening. By the time money is involved, the groundwork has already been laid, and the scam feels just like another online interaction.

Social media platforms have become prime hunting ground for scammers. The result has been staggering:

• Since 2021, one in four people who reported losing money to scams said that the scheme started on social media.
• Between 2021 and 2023, over $2.7 billion dollars have been stolen through social media scams.
• 44% of social media scams were people trying to buy something through an ad or online marketplace post.

How the Scam Hook Works

Social media scams come in many forms, but the tactics are strikingly similar. Scammers operating on social media are utilizing tactics that are designed to trick, manipulate, and defraud users in increasingly convincing ways. Below are some of the common tactics:

• Marketplace scams: Online marketplaces have become a gold mine for scammers. In a September 2025 survey of 1,000 US adults that have used Facebook, 63% report shopping on Marketplace. Of those, more than 1 in 8 (14%) report being scammed, while nearly 8 in 10 (79%) report seeing scams on the platform. If a deal seems too good to be true, it is likely the case.
• Imposter scams: Scammers create fake social media accounts that impersonate celebrities, businesses, or even government officials to make connections with individuals. Victims are urged to send money to help the celebrity out or share their financial information with the government representative. Then, the accounts are taken down.
• Romance scams: Scammers use social media or online dating sites to find victims. They build an emotional connection over time. They claim to live far away, so they can't meet in person. Then they start asking for money for medical expenses or even a plane ticket to come meet their victims. Once the money is sent, the fake accounts are deleted. After investment scams, romance scams have the second highest losses on social media.
• Fake job opportunities: Social media and online job marketplaces have become filled with scammers offering fake opportunities to job hunters. Victims are asked to pay for so-called certifications and starter kits as part of the job onboarding. The scammers steal victims' credit card and banking information and then shutter their own social media accounts.

Time to Hold Social Media Platforms Accountable

Social media companies have built systems that reward engagement but overlook safety. Their tools for detecting and removing scams are reactive, slow, and often ineffective. Users are left to fend for themselves in environments designed to be addictive, not secure. It’s time they take real responsibility by investing in stronger protections to block fake ads or take down criminal profiles, enforce meaningful standards, and put user safety ahead of growth at any cost.