The Financial Intelligence Analysis Unit (FIAU) would like to inform subject persons that the Financial Action Task Force (FATF) has published a new report entitled ‘Combating End-to-End Illicit Financial Flows Linked to Scam Compounds – Applying the FATF Toolkit to the Fraud Epidemic’.
Scam compounds are becoming an increasingly prominent feature of organised crime globally. The FATF report sets out practical measures aimed at disrupting the operations of scam compounds. Victims trafficked into scam operations may be recruited through deceptive job offers and moved across borders, where they may face debt bondage, confinement, violence, sexual exploitation, torture and threats. Meanwhile, cyber scam hubs have targeted individuals in more than 100 jurisdictions, causing losses that are often impossible to recover once the proceeds are withdrawn, transferred offshore or converted into virtual assets.
Scam compound operators are abusing various financial channels to move and launder criminal proceeds, including cash, money mule accounts, informal transfer services, virtual assets, instant payment platforms and digital financial services. AI-enabled content, deepfakes and automation allow criminals to operate scams more efficiently and at a lower cost, making it increasingly difficult for victims to identify fraud attempts.
The report further explains how early signals, such as fraudulent advertising and malicious domains, can enable fraud detection even before fraudulent financial transactions occur.
The FATF has also outlined principles for combating illicit financial flows linked to scam compounds, including:
- Target the wider criminal ecosystem by focusing on criminal leadership, trafficking networks and key facilitators of scam networks.
- Disrupt illicit financial flows end-to-end by hindering the infrastructure that services scams, while also tracing, freezing and recovering victims’ funds.
- Connect the networks by strengthening cross-sector cooperation and information sharing among relevant stakeholders.
- Act swiftly across borders by prioritising coordinated action within the first 24–72 hours after a scam is detected or reported.
- Put victims at the centre by ensuring appropriate protection, safeguards and support.
- Adapt and focus on lasting impact by continuously responding to emerging technologies, methods and payment channels.
Lastly, the report concludes with additional case studies and good practice examples.
Interested parties may access the publication directly from the FATF’s website or from the FIAU’s website under the tab “FATF”.