FATF urges global action to disrupt scam compounds

The Financial Action Task Force (FATF) has urged global action to disrupt “scam compounds” that fuel a substantial share of transnational fraud, arguing they are a major driver of a global fraud economy estimated at $500bn annually.

In its latest report, FATF notes that these operations are often staffed by trafficked victims—about 120,000 of whom are forced to carry out online scams in Myanmar—while being supported by crypto and instant payment platforms, money mules, social media, messaging services and AI-enabled content. The trend is moving toward smaller, more mobile operations, with compounds formed out of repurposed casinos, rented rooms, apartments, coffee shops and even moving vehicles, the watchdog warned.

The FATF emphasised that countries tend to tackle scam compounds downstream—through asset tracing and targeting victim payments—but called for upstream disruption as well, targeting fraudulent advertising, recruitment activity, malicious domains and telecom indicators.

FATF president Giles Thomson said the response must be modernised and accelerated, focusing on dismantling criminal networks and working with technology, social media and communications sectors to prevent and disrupt scams before they happen, with quicker interventions to freeze and seize proceeds once scams occur.

The FATF report also sets out six pillars to combat illicit financial flows: shifting focus to leaders and traffickers; disrupting infrastructure and services; sharing information across institutions and platforms; acting quickly across borders; protecting trafficked victims; and updating approaches as operations decentralise.

Jonathan Frost of BioCatch welcomed the emphasis on compounds; a CybSafe study published on 6 November found 22% of Britons have received scam calls impersonating a familiar person, with 36% of these reports costing employers money or data.