Scam outlines an economic model you label “compound capitalism.” Could you explain this concept?

We see scam compounds as one of the latest manifestations of predatory capitalism. Cyber scams on an industrial scale are something quite new, but at the same time, this phenomenon can be inserted into a broader, longer-term perspective. We highlight four dimensions of this situation.

The first is exceptionality. The compounds in Southeast Asia are like a more extreme form of special economic zones. It’s pure segregation: you have walls, surveillance, barbed wire, guards everywhere, and cameras, and state actors are complicit in it. But it’s paradoxical because the people trapped inside are also connected via the internet to the outside world 24/7 through the internet, although they cannot communicate freely.

The second aspect is labor organization and workforce control. These employers provide accommodation and try to control the workforce by organizing all aspects of production. The workers are trapped inside premises where they sleep, eat, and live. There are historical precedents that help to make sense of this, like the mining compound regimes in apartheid-era South Africa as well as the dormitory regimes in China during the reform and opening up period.

The third dimension is data extraction. Scam compounds, like legitimate tech companies, extract data from users in sophisticated ways. It’s an industry based on the appropriation of information, with a very strong personal component. By making their victims feel seen and heard, they cultivate a kind of addiction.

Scammers have an ability to exploit fundamental human vulnerabilities. Loneliness is a global problem, and despite technological advancement, social connections have not necessarily strengthened. Dating and making friends has become even more challenging than before. Scammers prey on these emotions. I had a former scam worker tell me that scammers will analyze your background, understand what you need the most, curate a dream and make you believe you can get it. The poorer and more marginalized you are, the more vulnerable to scammers you are, because you need something.

The final aspect of compound capitalism is dispossession and proletarianization. Many of the people who end up in the compounds are from low-income backgrounds, with only basic education. They’re often from families who’ve lost their livelihoods or are young people struggling to find well paid work. They’re desperate, they feel responsible for their families, and they don’t have decent alternatives to gain a living.

You suggest that “any attempt to sketch a profile of the typical victim of forced criminality in the industry is likely to be an oversimplification.” Why is that?

The broad spectrum of experience makes it impossible to generalize. Individuals enter these operations under very different conditions. Some are tempted by fake job offers, some are trafficked, and some join knowing they will be engaging in illegal work, but without realizing the full extent of the danger until they are trapped. And this doesn’t mean they planned to become scammers. We met people who said they thought they were going to the border cities to smuggle jade or to Cambodia to mine Bitcoin.

Many victims fit the traditional human trafficking profile and are relatively young, have a basic educational level and are experiencing financial hardship. But this doesn’t describe everyone — victims from South Asia often have higher education and English proficiency, partly due to different recruitment methods. Chinese, Vietnamese, or Indonesian victims are more likely to be trafficked through informal connections such as friends, people from the same village, or via online job ads on social media. South Asian or African victims often enter through job agencies who turn out to be traffickers.

While some victims are forced into programming roles or AI teams, many more perform simple tasks that require no technical background, like copy-and-pasting scripts. In many operations, victims don’t need to speak another language — they use ChatGPT quite efficiently. So it’s misleading to assume that because they’re involved in cyber-enabled crimes, victims must have IT or language skills. That assumption risks leaving the most vulnerable victims behind.

The respectable global economy functions on the basis of exploitative or immiserating economic practices and policies. How do these feed into and worsen the shadow industries you analyze in Scam?

This kind of industry thrives on economic hardship. It expanded rapidly during the COVID pandemic, when mobility was limited, it was difficult to find work, and people were feeling lonely, miserable, and stressed. This created demand for the kind of “services” that scammers provide, and it’s much easier to target people who are isolated.

At the same time, a lot of people lost their jobs, and many family business went bankrupt. Many people were so desperate to find work that when somebody came up saying “I have something for you,” they didn’t question it — and ended up in compounds. Maybe in normal times, they would have thought twice about going to a new country.

And this is likely to get worse. Many economies face structural challenges, and the Chinese economy is slowing down. Young people are suffering, losing hope, and turning to measures like tang ping [“lying flat” — to withdraw completely from the ultracompetitive Chinese labor market], because it’s very difficult to find jobs where you earn enough.

Some have suggested that China’s Belt and Road Initiative [BRI] has fed the growth of scam compounds — is there any truth to this?

We’ve tried to take a measured look at the role played by the Chinese state because a lot of analysis has tried to tie the growth of the scam industry to the BRI. One problem with this is that a majority of countries have signed a memoranda of understanding [MOU] with China, to cooperate on the BRI. But the scam industry is focused in just a handful of countries. Singapore, Malaysia, and Indonesia for example, have signed BRI MOUs, but haven’t seen the same explosion of scam activity as Cambodia, Laos, or Myanmar.

Local conditions are the key factor, which act as a magnet for criminal operations and allow them to flourish. The BRI is much less important. In fact, the scam industry has harmed the BRI’s reputation — in some cases, scam operations and other dubious investors have falsely claimed to be BRI-endorsed, or to have some kind of state support.

It’s definitely worth looking at the involvement of Chinese state-owned enterprises [SOEs] in the scam industry. We’ve seen a lot of cases where SOEs have been hired for construction on properties involved in online gambling and scams. But this doesn’t mean they’re investors, just that they’re the contracted builders. We can’t say definitively whether this is due to a lack of due diligence or a lack of concern about who they’re doing business with. But for sure it’s a result of the rapid global expansion of Chinese contractors.

Scam argues that in these increasingly polarized times, a more nuanced take on “Global China’s underbelly” is required. What do you mean by this?

In addition to approaches that focus on Chinese government agencies and SOEs and the local actors they work with, there’s another, much less visible layer of actors that could be called “Global China’s underbelly.” This layer includes the transnational operations of Chinese crime syndicates, including their underground money flows, engagements with each other, and their foreign counterparts and local groups, as well as China’s efforts to pursue these actors.

There’s a complex ecosystem of actors from a range of backgrounds and orientations that overlaps with the legitimate economy. Of course, there are triads. But there are also pro-unification Taiwanese gangsters alongside nationalist influencers, more recently established organized crime groups, ordinary businessmen, human traffickers, and money launderers who don’t see their business as necessarily criminal.

The term “Global China” is basically meaningless. Instead, there’s a diversity of actors, all pursuing their own agenda. Sometimes these agendas align with each other, or perhaps even with the Chinese state. Sometimes they don’t, and conflict arises. More scrutiny should be given to this underground layer of actors to better understand who these people are and how they think.

What role are social media and the tech giants playing in this picture?

In 2022, we only encountered isolated cases of victims making friends in online gaming platforms, before being added on WeChat and lured into the scam industry by stories of high salaries and luxury lives in Cambodia. But by 2024, nearly one-third of the Chinese victims we interviewed had been targeted through social media platforms like Douyin or Kuaishou.

Media exposure, for example on Weibo, can accelerate rescue efforts. But some victims whose families have attempted to use Weibo to rescue them are still trapped today. To complicate matters, social media can sometimes hamper rescue efforts. There are numerous accounts on Chinese platforms claiming to have the ability to rescue victims from scam compounds. But many turned out to be scams themselves, exploiting victims’ family members by taking their money and disappearing without a trace.

Outside of China, Facebook and Telegram seem to be the main platforms hosting job ads for scam compounds. Encryption and minimal content moderation have made Telegram in particular into a favorite platform for illicit trades, from selling personal data to drugs and human trafficking. I have personally seen group chats where people are sold like commodities, where traffickers openly list their prices.

While social media platforms have helped raise awareness about trafficking cases, they remain largely unregulated in preventing scams and recruitment by traffickers. In some cases, we can say that they even have facilitated exploitation. It is crucial that NGOs and the government work with tech companies in the fight against human trafficking and online scams and push them to take proactive measures. They should actively remove scam content, strengthen monitoring systems, and implement stricter safeguards.

NGOs face immense challenges addressing the situation. Could you explain some of the structural barriers to grassroots action?

For years, governments in the countries that host major scam sites denied their existence. But over time, they’ve been forced to recognize the problem because it’s just so blatant. Even so, they still downplay the extent of the industry, often dismissing reports of violence as labor disputes, or characterizing survivors as criminals rather than victims. Also, the people behind the scam industry often have access to local elites who can provide protection, which means that people working to try to expose scam operations or to help people escape can face very serious risks.

For example, journalists in Cambodia, the Philippines, and Myanmar play a crucial role in documenting scam industry compounds and the actors behind them. But that kind of reporting comes with significant risk, especially given increasing media restrictions. NGOs and more informal rescue groups also find themselves going against the state narrative — just trying to help people can be very risky.

There are also a lot of logistical challenges. Myanmar, for example, is in the grips of a very bloody conflict since the junta tried to seize control of the country, which raises acute risks and practical challenges.

More broadly, sudden policy shifts under the second Trump administration have been devastating. Agencies including USAID [United States Agency for International Development] provided funding for many journalists and groups that monitor the industry, investigate criminal activity, help people to escape, or provide care to survivors. The very abrupt cancellation of that funding has forced many groups to just stop working. People have been laid off. Others are working reduced hours or without pay, and that can only continue for so long. Shelters that were helping people who had escaped now don’t have money to house or feed them or provide medical support.

So will state actors have to take the lead in countering compound capitalism?

The scam industry is a global issue, not just a Chinese or American one. So it’s imperative to have all sides talking. But there are an increasing number of barriers and political risks.

There’s no sign that US policy will change anytime soon. So there’s a very clear need for other countries to step up and help fill this gap, at least in terms of funding. There’s a humanitarian imperative, but also self-interest — this industry affects the whole world.

It takes local leadership to counter human trafficking, as well as knowledgeable external partners that monitor the situation and push host countries into taking action. China’s policy of not interfering with other countries’ internal affairs is a further complicating factor. But in a positive development, Chinese NGOs have told me that the government is sending signals that they want to help with direct survivor support.