A Billion-Dollar Problem Hitting Australian Businesses and Households
The scale of financial losses to scams in Australia is staggering. A report compiled by the Australian Competition and Consumer Commission (ACCC) found that in 2021 alone, over $2 billion was lost to scammers. Of that, approximately $700 million was stolen through investment scams. A further $142 million was lost to "romance scams" — where scammers create fake social media profiles, build a fabricated relationship over weeks or months, and then ask for money or persuade victims to "invest" in cryptocurrency or a fake trading platform before disappearing with the funds.
People of all ages fall victim. While Australians over 65 lost the most money overall (and are least likely to report it), even 18–34-year-olds reported losing $53 million to Scamwatch. And the payment method of choice is shifting fast — cryptocurrency payments to scammers increased 216% in a single year, precisely because they're difficult to trace and near-impossible to reverse.
The ACCC's Targeting Scams report found that only 13% of Australian scam victims ever report their loss to Scamwatch. The true scale of losses is almost certainly far higher than what's recorded. If you've been scammed, reporting it could protect someone else.
The Fraud Factories Behind the Scams
Most people imagine a scammer as someone sitting in a bedroom somewhere running a scheme alone. The reality is far more industrial — and far more sinister.
Sinister compounds have appeared across South-East Asia — in Cambodia, Myanmar, and Laos — that operate as industrial-scale scam operations. These compounds are heavily guarded. Many of the people inside them did not choose to be there. They were trafficked there: recruited through fraudulent job advertisements promising legitimate work, or in some cases simply kidnapped off the street.
Jason Tower, the Myanmar country director at the United States Institute of Peace, has conducted extensive research into these online scam centres and human trafficking rings across the region. He explains that people "are forced" to come in and scam people, and "are forced" to meet the targets set by their traffickers. If they don't meet their daily quota, violence follows.
Surveillance & Guards
Compounds are heavily guarded with barbed wire, CCTV, and armed security. Workers are denied access to phones and internet outside supervised scamming sessions.
Forced Work Hours
Workers are typically forced to operate 8am to 11pm daily. Those who fail to meet scamming targets face beatings and other punishments.
Massive Scale
Single compounds can house tens of thousands of workers in dormitory conditions. The Golden Triangle Special Economic Zone in Laos alone shows newly constructed tower blocks row after row.
Criminal Infrastructure
Operations have links to political connections, corporate organisations, and professional money-laundering networks, with an ever-increasing global reach.
How the Fraud Factories Operate
Vietnamese cybersecurity researcher Hieupc, working at Vietnam's National Computer Security Centre, gained access to backend systems used by scam centres in Cambodia. The documents he retrieved reveal an astonishingly well-organised criminal enterprise.
The fraud factories are divided between different criminal outfits — teams from China or Vietnam, for example, operating on different floors of the same building. Each team is given a list of targets and a script tailored to people who speak their language. The tactics deployed depend on the scam type:
Victims are persuaded to invest in high-yield digital investment platforms — effectively pyramid schemes. Chat apps are used to build trust over time. Once a large sum is invested, the platform "freezes" the account and the victim is told to pay fees to release funds. The platform disappears shortly after.
Scammers build fake romantic relationships using fabricated social media profiles over weeks or months. Once trust is established, they introduce the romantic partner to an "investment opportunity" or request money for a fabricated emergency. Romance scam losses totalled $142 million in Australia in 2021.
Victims are lured into casino games that never actually pay out. The games are rigged, but designed to appear legitimate — victims chase losses before eventually the platform disappears.
Every few months the criminal group shuts down the websites or apps used for a particular scam and creates new ones with a different design and name — but operating identically. Victims are found through social media targeting or by paying YouTube creators to advertise the fake platforms. Each small team, according to Hieupc, racks up millions of dollars.
How the Pandemic Supercharged the Problem
The rise of South-East Asia-based fraud factories accelerated significantly during and after the COVID-19 pandemic. The collapse of tourism decimated revenue in casino towns across Cambodia, Myanmar, and Laos. Many of these locations had pre-existing issues with organised crime and money laundering — primarily from Chinese criminal networks following major Chinese investment into the region.
When COVID emptied out the casinos, Chinese gangsters pivoted their operations — from physical casino-based fraud to online scam factories. The shift was logical: online fraud could target victims anywhere in the world, scaled far more easily than physical casino operations, and was harder for law enforcement to pursue across international borders.
As China introduced COVID-related travel restrictions and stepped up public education campaigns warning citizens about these scams, the criminal operations adapted again — expanding their targeting beyond Chinese speakers to pursue victims across English-speaking countries, including Australia.
The Global Anti-Scam Organisation (GASO) has identified fake Australian investment platforms — including "AUSTRALTRADE" and "AUSFOREX" — as actively targeting Australians. Their list of known scam sites is continuously updated and free to check before transferring funds or making any online investment.
The Human Trafficking Dimension
Jan Santiago, a spokesperson for the Global Anti-Scam Organisation (GASO) — set up in June 2022 by Singaporean Jessica Lin after she was herself scammed — describes these operations as analogous to a clothing factory: criminals force thousands of people to work, except the product is financial fraud rather than garments. It's "basically a 'fraud factory,'" he says, with links to political connections, corporate organisations, professional money-laundering networks, and an ever-increasing global reach.
Beyond financial scamming, Santiago says these fraud factory bosses have begun a secondary business: large-scale human trafficking — with torture, rape, and other abuses used to supply the labour-intensive criminal enterprises.
The scale is not small. Journalists Lindsey Kennedy and Nathan Paul Southern visited the Golden Triangle Special Economic Zone (GTSEZ) in Laos — a compound nicknamed Kings Romans — and found newly constructed tower blocks surrounded by barbed wire, row after row. Locals said the tower blocks house the scammers as dormitories. In one compound alone, tens of thousands of people could be held in modern slavery conditions — visible through the clothing hanging from windows, indicating every floor was occupied.
Law Enforcement: A Difficult Fight
A spokesperson for the Australian Federal Police operating in Cambodia confirmed that "cyber activity against Australians is increasing in frequency, scale and impact" and that the AFP was working closely with Cambodian law enforcement to reduce transnational cybercrime. Cryptocurrency is the currency of choice. "It's easier for traffickers to receive, hide and move large amounts of money with less risk of being detected," the spokesperson said.
But the challenges are severe. Some Cambodian police believe that scam bosses have the right to detain workers because those workers signed a contract — however fraudulently obtained. When Thai police accompanied Cambodian police to rescue approximately 3,000 Thai nationals believed to be working for scam operators against their will, they managed to rescue only 66 people — local corruption and resistance preventing access to most sites. At one gated compound in Sihanoukville, Thai police spent eight hours negotiating with Chinese owners before Cambodian police would even assist — and ultimately had to pay $1,500 to retrieve just 24 workers.
What This Means for Australian Businesses and Individuals
For Melbourne businesses and individuals, understanding the industrial scale behind these scams matters because it explains why they're so sophisticated. These aren't opportunistic individuals — they're well-resourced criminal organisations with scripts, target lists, refined social engineering techniques, and the ability to constantly evolve their approaches.
The best protection is awareness and scepticism. Key points to share with your team and family:
Verify before you invest
Any unsolicited investment opportunity — particularly one involving cryptocurrency — should be treated with extreme caution. Check the GASO list of known scam sites. Verify any trading platform against ASIC's register of licensed financial services providers. Real investments don't require urgent decisions.
Be sceptical of online relationships that turn to money
Romance scams work precisely because they're patient. If an online relationship — however convincing — eventually introduces any kind of financial request, investment opportunity, or emergency requiring money transfer, treat it as a red flag regardless of how long or genuine the relationship has felt.
Never pay in cryptocurrency to resolve a problem
No legitimate Australian government agency, bank, utility provider, or law enforcement body will demand payment in cryptocurrency. A request to pay via crypto — for any reason — is a definitive scam indicator. The same applies to gift cards, wire transfers to overseas accounts, or any other untraceable payment method.
Report it — even if you're embarrassed
Only 13% of Australian scam victims report their experience to Scamwatch. Scammers count on victims feeling ashamed. You should not — these operations are run by sophisticated, well-resourced criminal enterprises. Reporting your experience directly helps authorities track emerging tactics and can protect others. Report to Scamwatch or the Australian Cyber Security Centre.
Protect your business accounts
Business email compromise — where a scammer impersonates a supplier or executive to redirect payments — is one of the most costly scam types for Australian businesses. Enforce multi-factor authentication across all business email accounts, establish verbal call-back procedures for any payment instruction changes, and train staff to recognise the signs.
Don't Feel Ashamed — These Scammers Are Professionals
It bears repeating: please don't feel silly or ashamed if you have been tricked by these scammers. The people behind them are sophisticated, patient, and master manipulators. They work in shifts, follow tested scripts, have access to your social media profile and know how to exploit human psychology. The people working these scam operations are often victims themselves.
If you suspect your business systems have been compromised, or you'd like to understand your organisation's exposure to business email compromise and invoice fraud, Melbits offers a free initial consultation. We help Melbourne businesses across managed IT, cybersecurity assessments, and staff security awareness — the most effective long-term defence against social engineering.