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Extractive summaries and key takeaways from the articles carefully curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Since 2017 | Week 387 | February 7-13, 2025 | Archive
The vast and sophisticated global enterprise that is Scam Inc
The Economist | February 6, 2025
Extractive Summary of the Article | Listen
3 key takeaways from the article
- “Pig-butchering” is the most lucrative scam in a global industry that steals over $500bn a year from victims all around the world. “Scam Inc” is about the most significant change in transnational organised crime in decades.
- The industry is growing fast. In Singapore scams have become the most common felony. The UN says that in 2023 the industry employed just under 250,000 people in Cambodia and Myanmar; another estimate puts the number of workers worldwide at 1.5m.
- Online scams will be even harder to curb than the drugs trade—and, in contrast with drugs, the option of legalisation, regulation and treatment is not available. Education may help. But policing must also change. To fight the scammers, the authorities must create networks of their own. Today too many police forces that devote huge resources to combating the drugs trade treat scamming as a nuisance and victims as dupes. Instead they need to work with banks, crypto exchanges, internet-service providers, telecoms companies, social-media platforms and e-commerce firms.
(Copyright lies with the publisher)
Topics: Crime, Technology, Scam Inc, Pig-butchering, Sha zhu pan
Click for the extractive summary of the articleEDGAR MET Rita on LinkedIn. He worked for a Canadian software company, she was from Singapore and was with a large consultancy. They were just friends, but they chatted online all the time. One day Rita offered to teach him how to trade crypto. With her help, he made good money. So he raised his stake. However, after Edgar tried to cash out, it became clear that the crypto-trading site was a fake and that he had lost $78,000. Rita, it turned out, was a trafficked Filipina held prisoner in a compound in Myanmar.
In their different ways, Edgar and Rita were both victims of “pig-butchering”, the most lucrative scam in a global industry that steals over $500bn a year from victims all around the world. “Scam Inc” is about the most significant change in transnational organised crime in decades.
Pig-butchering, or sha zhu pan, is Chinese criminal slang. First the scammers build a sty, with fake social-media profiles. Then they pick the pig, by identifying a target; raise the pig, by spending weeks or months building trust; cut the pig, by tempting them to invest; and butcher the pig by squeezing “every last drop of juice” from them, their family and friends.
The industry is growing fast. In Singapore scams have become the most common felony. The UN says that in 2023 the industry employed just under 250,000 people in Cambodia and Myanmar; another estimate puts the number of workers worldwide at 1.5m.
Online scamming compares in size and scope to the illegal drug industry. Except that in many ways it is worse. One reason is that everyone becomes a potential target simply by going about their lives. Another reason scamming is worse than drugs is that the industry is often beyond the reach of the law. The last reason the scamming is worse than drugs is that it is so innovative. Crooks use advanced malware to harvest sensitive data from victims’ devices. Online marketplaces trade tools and services, including web domains, artificial-intelligence (AI) software and torture instruments. Cryptocurrency enables crooks to move money quickly and anonymously into the real world. Regardless of its merits, the crypto deregulation under way in America will give them fresh opportunities.
Online scams will be even harder to curb than the drugs trade—and, in contrast with drugs, the option of legalisation, regulation and treatment is not available. Education may help. But policing must also change. To fight the scammers, the authorities must create networks of their own. Today too many police forces that devote huge resources to combating the drugs trade treat scamming as a nuisance and victims as dupes. Instead they need to work with banks, crypto exchanges, internet-service providers, telecoms companies, social-media platforms and e-commerce firms.
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