667. Here’s Why You Are Constantly Fighting Off Scammers

At AJ Bell, we believe investing is for everyone. And when we say everyone, we mean your dad, Dan, Danielle, Dean, Dave, Del, Del's delivery driver, Denise, Denise's dentist, Dinesh and Devon's strongest man, Donathan. Donathan? Donathan, that can't be right. Donathan. Well, whatever your name is, if you're a real person, investing is for you too. AJ Bell, feel good investing. The value of your investments can go up or down. In January, a 38 year old Chinese born entrepreneur named Chen Ji was arrested in Cambodia and extradited to China. He was one of the richest people in Cambodia and one of the best connected. He was an elite businessman who also served as a government adviser. A few months before this arrest, it was the US government who went after Chen. They designated his holding company a transnational criminal organization and they charged him with fraud and money laundering. They also seized $15 billion worth of crypto. Where did all that crypto come from? Chen Ji, in addition to running a real estate development firm and other businesses, allegedly ran a massive online scamming operation that specialized in what the Chinese call pig butchering. That means fattening up the scam victims for months or years. And then when the time is right, the slaughter. US prosecutors say that cyber crime in Cambodia generates as much as $19 billion a year, which would account for roughly half of the Cambodian GDP. The US government says that scammers in Southeast Asia stole $10 billion from Americans in 2024 alone. There were other victims too. After Chen was arrested in Cambodia, thousands of his workers fled the country. They had reportedly been trafficked to Cambodia and they were being held against their will at scam compounds. Today on Freakonomics Radio, is it fair to call scamming an industry? It is absolutely an industry, a very complex, always evolving, very competitive industry. We will hear how the industry works from getting hold of your data. Privacy is a myth. Our information is out there and it is available to the highest bidder. To the daily economics of the industry. You can send a message now to 100 million people. And if you get 0.01 percent, that's still 10,000 people who will maybe send you a thousand dollars and all of a sudden you've got 10 million dollars. So is there anything to be done about it? Let's find out together starting now. This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Steven Dubner. OK, so let's start with this. Just how much scamming are Americans dealing with? There is a lot of variation in estimated prevalence of scams and fraud. That is Marty DeLima, a professor at the University of Minnesota. The best estimates, and I'm about to do a meta-analysis on this actually, indicate that fraud affects 10 percent to potentially 20 percent of Americans per year. And when you say affects someone, that's a very wide verb. Does that mean there's a loss involved? It means that they transferred money to the criminals and the base rate of exposure is incredibly high. Give me a day that you haven't received a bogus text message, a phone call, a scam email, I mean, imagine if other types of crimes targeted us at that same base rate. DeLima isn't a criminologist or a psychologist. She is a gerontologist, which means she studies human aging and she teaches in Minnesota's School of Social Work. Her research focus is quite specific. I'm very oriented towards the older adult who's the victim of scam. So scam is a type of trauma. It's a betrayal trauma. We definitely need trained clinical mental health workers in this area. Scam victimization often leads to suicide. How well known is that connection? I could imagine given the private nature of suicide that could be hard to enumerate. It's often not known, unfortunately, but what's been striking is talking to providers in the space, people who counsel victims and their family members. They're always surprised by how raw victims are and how their life view kind of shatters, how they hold themselves, their self-efficacy, and then the financial costs as well. It often leads to the sense of deep hopelessness that results in suicide. Are older adults the most common scam targets or maybe the most common victims? There's a myth that older adults are more trusting and that they lack sophistication with different forms of technology that causes many young adults and middle-aged adults to think that they're less susceptible to scams. But that's just not what we see necessarily in the data. You typically see that it's middle-aged adults. They tend to report victimization at the highest frequency. And it is true that for different types of scams, we see different age groups being more likely to be targeted and victimized. For example, fake job opportunities and online shopping scams. That's way more likely to be young people. We also know that some of these extortion scams are targeting young men like young boys, teenagers, and preteens. But there are some scams that do seem to affect older adults at greater rates. One example is the tech support scam. We do see that when older adults are victimized, they have far more money stolen on average. So it could be that older adults are experiencing certain types of scams where more and more money is being requested by the criminals and it's not getting reported until the person discovers this is a scam. And by that point, it adds up to $10,000. But it also could be that older adults have more assets to exploit. It's possible that scammers are asking for more money from those individuals. Looking at the most recent data from the Federal Trade Commission, we see that adults, I believe 80 plus report somewhere around a median amount of $1,400. And then adults 50 and younger, it's closer to $400, $500. So it's like three times more. Let's hear about you for a minute. How did you come to be a gerontologist in academia looking out for fraud? When I was a graduate student, I actually sat in as part of a research project on the Los Angeles County Elder Abuse Forensic Center. That's a multidisciplinary team of law enforcement, adult protective services, health care workers, some of the cases involved scams and fraud. And I was fascinated by those cases because in many of them, the older adult didn't seem to have clear indicators of vulnerability or cognitive impairment. So they didn't look necessarily like some of our other victims in those cases who are incredibly vulnerable, sometimes bedbound. And the perpetrators weren't individuals that they had this lifelong relationship with, like an adult center daughter. They were strangers. Can you give me an example of the kind of financial fraud by someone who was not known to the victim that you came across as you were doing your graduate work? Some of the scam cases that would come through involved older adults who are approached by scammers in person. Sometimes they would be pumping gas at the gas station or they would be at the supermarket. And it was often a young woman who would come up to an older gentleman, say, oh, I'm in an abusive relationship. I'm running away. Can I get some money? And then that would just start this predatory relationship where in the end, in some of these cases, the woman would move in to the older adult's home, move them into a back room or get them placed in a nursing home. So that sounds terrible. It also sounds very handmade, right? That's kind of a one to one. And it's very time intensive and all that. It is. And scams have changed so much since then. This was in 2013, 2014. So the internet makes it a little bit easier to be more efficient, I would assume. Absolutely. And then you're safer from prosecution. If you don't reside in the United States, why spend all of your effort trying to meet people in person? That's really costly when you can blast out an email to thousands of people. Some of the cases that we encountered were lottery scams. And it was almost like no amount of reasoning with the older adult would be enough to safeguard them and have them walk away. What's the lottery scam? How does that work? You first get some windfall, some reward, often in a lottery, it's money. But in order to get that money, you have to pay taxes. You have to pay the shipping fee or the money transfer fee. You're seeing the same scam recycled with kind of a different premise every time. OK, now you've just hit the nail on the head because the reason we're here, Marty, is because of an email that I received that turned out to be the first of many. And as they kept coming, I wised up to it, but the first one and then even the second one, I was more enthusiastic even after the second one. Can I just read it to you and you'll tell me what you would have made of it? Yeah. Just wanted to reach out again. This person wrote her name, by the way, is Ms. Janeth J.A.N. E.T.H. which sounded real enough to be real. Just wanted to reach out again. I wanted to check in regarding the message I sent earlier about the Yamaha piano that belonged to my friend's late husband. It's a special piece with a lot of meaning and she'd be so happy if it went to someone who truly appreciates music. And then she keeps going. If you or anyone you know might be interested, she'd be happy to share more details. So should that have been enough? Just that offer of a free piano to have had my guard up. It depends if you're actually in the market for a piano, right? That's the thing about these scams. It could be a totally mass market email to as many email addresses that they could scrape off the internet. But then there's the couple people out there who, you know, that sounds like a great offer. So I don't think that they were actually targeting you in particular, but I do think that it would be effective for some people. All right. My feelings are a little bit hurt that I wasn't being targeted directly. So what should I have done at this point? If you had detected it was a scam, you should report it as such using your email client. Usually there's a little button at the top of your email and your browser that says spam or report spam. And I would just click that. Oh, yeah. But, but doesn't that happen a trillion times a day? Like what is the provider actually going to do? That's not an actual fraud alert. That's just like a spammy email alert, right? It gives them data on the types of messages and where those messages are coming from that are scammed. So maybe they can block it from getting to your inbox in the first place or pre-filter it as a potential scam, but you're right. That's not the same as reporting it to the Federal Trade Commission as a scam. Would this piano email that I got rise to the level of being reportable to the FTC? Absolutely. In fact, most of the cases that are reported to the FTC have $0 reported as what was stolen. So most of the case reports in the FTC's database are attempted fraud, not actual victimization. Okay. So let's hear from someone at the FTC. My name is Katie Daffin and I'm an assistant director at the FTC's division of marketing practices, which is where we really run the fraud program at the Federal Trade Commission. Actually, Daffin left government recently after our interview to start her own consumer protection firm. Anyway, the FTC began actively targeting scams in the 1960s and 70s during the consumer protection movement. Those were the days of chain letters and sweepstakes fraud. In the 1990s, as part of what was called Project Telesweep, the FTC started collecting data on telemarketing fraud. Today, it collects data on scams of all types and works with other government agencies to find and prosecute scammers. Last year, there was a 25% increase in scam theft compared to the year before. We are seeing such a large increase in scams. We are seeing such large increases in reported consumer losses to fraud. And the primary driver of that is with investment, romance, and imposter scams. So how much money is being scammed? The FTC compiles a variety of datasets from complaints they receive directly, also from the Better Business Bureau and from state attorneys general, and so on. They also try to account for underreporting. And so Daphne estimates in 2024, in the US, between $31.3 billion and $195.9 billion was lost to fraud. If we make a really conservative assumption, we get $10.1 billion lost by older adults and $31.3 billion overall. But if we assume instead that what we're seeing in our database only reflects 2% of losses from consumers who lost under $1,000 and 6.7% of losses for consumers who lost $1,000 or more, that's when you get the estimated loss of $195.9 billion. It's really astronomical. And here's Marty Dalima again. Scams absolutely ruined the lives of millions of people. They also erode our trust. They erode our trust in legitimate communication and systems that we need to rely on and in each other. I'm really glad you bring that up. That was something that drew me into this idea in the first place, because my feeling is that if you have to read every single email you get or answer every phone call or judge any in-person meeting through this filter of I may be being taken advantage of in some way, I mean my reaction is just to say, well, I don't want to read any emails or get any phone calls or meet anybody. And when we look at the data in the US in what's called social trust over the past 40 or 50 years, it really has declined a great deal. And I do wonder if there's any way to connect the loss of social trust to the amount of scamry, whether it's the newer digital versions or the older in person. People have done surveys on people who've experienced fraud and do find that there's a diminishment in social trust and interpersonal trust. The issue is that it's hard to know the timing or these people entered into this survey as being not as trusting to begin with or did the scam actually cause them to lose their trust? And that's hard to separate without good longitudinal data. So what share of financial fraud committed against Americans is done by overseas perpetrators? I don't have numbers on the exact proportion, but the vast majority of scams are perpetrated by transnational criminal organizations. So my Ms. Janeth with the piano is probably A, not named Ms. Janeth and B, probably doesn't live anywhere near the US, correct? That is correct. So let's hear a little bit more about that. How big is the industry, let's call it, where is it concentrated? The scam industry today is very distributed. There is a cluster of criminal organizations that fall along the border of Thailand and Myanmar. Those are called scam centers. They're largely run by Chinese crime families. There have been recent military or paramilitary actions against those scam centers. Many of them are relocating or there's copycat scam centers in countries like Ghana. So moving over to the African continent, taking over organizations and labor that has already existed there. Then we also have the Indian scam call centers or the boiler rooms. What's interesting is that each of these organizations tends to run a different type of scam, like the scam centers in Myanmar often ran the romance to crypto scams. What does that mean? The romance to crypto scam is often unfortunately called the pig butchering scam. Yes, pig butchering. What happens is a person might get a random text message like, hey, how's it going? Or are you coming to the barbecue this weekend? And some of us, again, not most of us, but some of us might say, oh, I think you have the wrong number. Who is this? And then it might lead into just some interaction, very friendly. Then maybe after quite a few text messages, these are long cons, right? These don't happen overnight. The criminal might say, oh, by the way, my uncle is trading in this new cryptocurrency. He's let me bring in a few friends. Do you want to get in on it? I can help you download this app. And these scam centers also have app developers. So they can make really legitimate looking investment apps that make it look like your crypto investment is going up and up and up. And it's when you actually try to take out that cash, you realize that it's all smoke and mirrors and the money is gone. The other troubling thing is many of these scammers come back at their target, pretending to help them recover their funds. So they might pretend that they're a local law firm or that they're a federal government agency Oh, I have to say it. That's a really clever thing to do. One thing we can't forget is how much capital these criminal organizations have amassed. So they do have funds to pay marketing teams and to do A, B testing on messages. It's more sophisticated than most people know. I mean, these scam organizations have attorneys, they have HR departments, the scammers have to meet quotas. It is organized like a legitimate business. They use mass marketing tactics, but I think it's getting more and more tailored with the tools that AI affords us and scammers. They can do more kind of background research, especially on high value targets. On individuals, you're saying. On individuals. When someone gets scammed, is it inevitably to some degree their fault? I'm not a victim blamer, but I'm just curious whether some of the scamming is so good that literally anyone, vigilant, smart, disciplined, etc., could still fall prey. There are scams that are literally so good that they could fool any of us. What are the best? Some of the best take advantage of existing problems with our slow bureaucracies, poor customer service. Let's say you get a text from your bank that says, did you make this purchase? It says you bought an Apple computer or something. Of course, a wise scam literate person would say, I'm pretty sure I didn't purchase an Apple computer. This is probably a scam, but let me call my financial institution. I'm not going to be foolish and click the number that appeared in the text message. I'm going to go on the website and I'm going to call their actual number. So here's the thing, bank call centers are so busy that you often hear a message that we will save your place in line. Just click one, record your name, and we'll call you back when it's your turn. Scammers know this. So what will they do? They'll wait 30 minutes after they sent that text message and call you and they will have faked the caller ID. So it will say Chase Bank, US Bank, Bank of America, whatever the bank that they initially pretended to be. And ask you questions and confirm your identity. They'll probably have information about you already. They might have your full social security number, your name, your date of birth. And it works and that would work for many of us. Once again, I'm not unimpressed. I mean, it's a business and they can be pretty good at the business plainly. Yeah. Yes. And privacy is a myth. Our information is out there and it is available to the highest bidder. So we should expect that criminals will know our names. They'll know our social security numbers. They'll know our addresses. They'll know our mother's maiden names. And it just makes it so difficult to be able to parse what is real and what is fake. Coming up after the break, who will AI help more? The scammers or the scam chasers? I think that we're going to have AIs fighting AIs very soon. I'm Stephen Dubner. This is Freakonomics Radio. We will be right back. The word scam entered the English language only in the 1950s, but don't be fooled. There are many older words in many languages that mean the same thing. Because as long as there have been people, there has been scammery. In ancient economies, merchants cheated customers with rigged scales and fake coins. In religious contexts, there were fake miracle workers and counterfeit relics. A main ingredient in any scam is desire. Part of the reason why cons work is because we want them to work. We want to believe we're getting the deal. We're getting the special thing. That is Mark Frank. He teaches communication science at the University at Buffalo. His PhD is in social psychology and he specializes in lying and deception. For someone like him, these are busy times. There's always this arms race with the scammers. As a scam is discovered, something to deal with it comes up. The scammers come up with something to defeat that. And then the scam catchers come up with something to catch them. Frank says that scamming goes back to even our pre-human ancestors. We see this ability in the great apes. Right? If you drop a bunch of fruit in front of a chimpanzee, that chimpanzee will look around. And if nobody sees it, he's going to hide some away. Frank has interviewed human scam artists. He knows how they think and why they are successful. They're really good at identifying your motives. And they feed those back to you. It's one of the things that gives you the confidence and makes you feel they understand you. Social media, AI, the world being connected, it's turbocharged this. You can send a message now out to 100 million people. All right? And if you get, you know, 0.01%, that's still 10,000 people who will maybe send you $1,000. And all of a sudden you've got $10 million. This is something the face-to-face scammer can't really pull off. There are some people who haven't heard of, you know, Nigerian princes finding a person of outstanding character like you to help them. The piano scam is just a recycling of the age-old Nigerian prince scam. And that, again, is the gerontologist Marty Dalima. In case you haven't heard of the Nigerian prince scam, here's how it works. The premise was, I am Nigerian royalty and I have this big inheritance, but I need help moving it out of the country. For some reason I've selected you to help me and you get a huge proportion of this inheritance. But first you need to transfer money to cover some fee. And why do some scammers make their scams so obvious? The Microsoft researcher Cormac Hurley suggested one answer to that question in a 2012 paper called Why Do Nigerian Scammers Say They Are From Nigeria? Dalima explains. So scammers don't want to put a lot of effort and cost into chasing targets who aren't ultimately going to transfer them money, right? So there's a huge cost to following up with more emails, more communication with would-be victims, but who would never actually go all the way. If you pick something like say you're a Nigerian prince that is so obviously a scam, the only people from a vast population that are going to fall into your net are the people who are the most susceptible, the people who haven't heard of the Nigerian prince scam, right? And who are the most likely that you can convert from a target into a victim. I think that many of the most obvious scams are going to fade out. These organizations are trying to come up with as effective and as tailored messages that will work for various subgroups of the population and automate some of that costly back and forth that the Nigerian prince scams were avoiding. Because if you can have your AI do the next step of following up with semi-interested people, that's not very costly for your organization. You don't really need the human element until maybe you're at the point of directing your target to transfer the money. So if I'm a scammer, the good news is that there's an audience for any kind of scam I can come up with. There is a sucker in all of us. I think when people read about some of these scams, they think, how could someone fall for that? What are they thinking? Without realizing that a different day, a different context, and a different premise, they would be a victim of fraud as well. I've done many studies on victimization, and my studies usually show that the victim profile varies across scam types. For example, investment fraud victims, they tend to be male, upper middle class, they have higher levels of confidence, they actually have better financial literacy than the general US adult population. But the profile of a typical lottery fraud victim, it's almost the complete opposite. Those victims tend to be older, slightly more female, have lower financial literacy, less education. You said the financial fraud victims tend to be male, upper middle class with a high level of financial literacy. I'm guessing a lot of people hearing this are surprised. To be a victim of investment scam, you have to have cash to invest. Someone who's living near poverty, they don't have the cash to invest in a crypto scam. The criminals are really good at profiling who might respond to the message or the bait that they put out. What's the pitch? What are they selling, and what is the victim buying? Criminals use a lot of different persuasion tactics. The tactics vary slightly based on the type of scam. We often see scarcity. This initial public offering isn't going to last. You have to get in on the ground floor. We see some social proof, evidence of other people who have gotten really rich from this cryptocurrency investment. Then the one that they use, and this is across all scam types because it's so effective, is emotional arousal. There's two main forms of emotional arousal based on valence. You can have highly positive messages where what they're promising is something you want, like a lot of money or a great romantic relationship. On the other hand, we have high negative emotional arousal. Those scams, they're trying to scare you. They might threaten you with arrest. They might say that you're about to experience a big financial loss. The way you avoid that loss is you comply with what I'm saying. Emotional arousal works in both directions. I bet it does. One reason why emotional arousal is so effective is that it overwhelms our slow, deliberate, analytical, cognitive processing that we sometimes call type 2 or system 2. It causes us to process things through system 1, where it is quick, intuitive, where we often rely on these heuristic shortcuts. Like, oh, this person I'm talking to on the phone, they're part of my affinity group, or they mentioned that celebrity I really admire. Likeability is a stand-in for trustworthiness. Criminals will do anything they can to shut off our system 2 processing. They don't want us to be deeply engaged, dissect the message that they're trying to say is real. They just want us to go straight to those heuristic shortcuts, and comply with whatever they're asking us to do. So I can imagine that one way of doing that is to broadcast that there's a scarcity, right? There is this windfall, but only the first X people will be able to get to it. But then, even if it's not scarcity, there's urgency, which makes people respond often a little bit irrationally. How do they use urgency typically? When I interview victims, they often talk about how the scammers made them feel like everything had to be done just then, or they would experience some major loss. Like, if they don't quickly go buy gift cards from the retailer, their money is going to be seized by the federal government. And they up the stakes every time they say, this is happening. And guess what? We have secret service agents surveilling you and following you. If you've disclosed your address that's on the phone, they'll give you step-by-step directions to the nearest retailer to buy those gift cards, or step-by-step directions to the corner convenience store to put money, cash, in a cryptocurrency ATM. If you had to identify just a handful of markers that make any one person more susceptible to fraud, given that you've told us that those markers may differ from scam to scam, what would be those markers? I think about loneliness, I think about financial fragility. A lot of these have to do with our unmet needs, loneliness, poor financial literacy, financial insecurity. All of these create these foundational need states, and scammers are experts in creating some sort of premise that will act as a salve for that need state. Can you give me an example? The best example I can think of is the romance scam. If you're feeling this need for emotional connection, for intimacy, you might let your guard down, or kind of intentionally choose not to notice some of the red flags when a young, attractive person reaches out to you on social media. AI in all its forms has been a great tool for scammers. I can replicate the voice of a loved one in fame, kidnapping, or something like that. How has that changed your field? AI has made it so that all of our old consumer education rules of thumb we've had to throw out the window. Things like look for spelling errors in the email, gone. Do a video call with this person that says they're in love with you, gone. We're having to reinvent the wheel and adapt to this environment that's changing so quickly that sometimes in my public presentations with older adults, I look at them and I say, I don't know what advice I can give you to stay safe in today's world. I would assume that AI will also be just as good, however, at identifying scammers? I certainly hope so. I think that we're going to have AIs fighting AIs in this space very soon. We think about the crypto to romance scams in these scam centers. They were run by people who were victims of human trafficking themselves. And with these AI tools, those entry level positions might not be necessary anymore. AI is already doing some good anti-scamming work. Both Apple and Android offer a personal AI assistant to screen phone calls. The big British phone company O2 uses an AI granny named Daisy Harris who loves to chat with scammers, hoping to keep them away from real people. And governments, some of them late to the game, are stepping up. We've been able to return billions of dollars to consumers over the years. I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. It was the U.S. Department of Justice that seized $15 billion worth of crypto from Chen Ji, the alleged kingpin of the pig-butchering operation in Cambodia. But most of the scam fighting in the U.S. runs through the Federal Trade Commission. The FTC's Bureau of Consumer Protection has a number of different litigating divisions. That, again, is Katie Daphne, who was working at the FTC when we interviewed her. There are folks who focus on privacy and identity protection, folks who focus on financial practices. The Division of Marketing Practices is focused on this more fraud and scam work. Daphne worked at the FTC under four presidential administrations. We always do our law enforcement. We always do policy work to try to make things harder for scammers. We're always trying to follow the scammers from one scam to the next. We can see sometimes how either the scammers who are on the fringes of something we just took down will go and start their own thing, or they'll team up with another company we've seen on the margins that is now stepping forward to fill a gap after we shut down a scam. But over time, one thing that we've had more and more success at doing is spurring industry to develop technological solutions to combat fraud. I was involved in our first competition under the America Compete's Act, where we were trying to address the proliferation of robocalls after the phone system merged with the internet to create that massive problem. Our most recent challenge, which finished up in 2024, was about voice cloning technology and the development of multidisciplinary approaches to protect consumers from AI and voice cloning. So how does the FTC shut down a scam? Let me talk to you about the anatomy of a income scam investigation. What we see is we get consumer reports directly from people who file a report at reportfraud.ftc.gov. We mine that data every day, and we use it to reach back out to people and find out what happened, who did you send your money to, how did you send it. We have authority to issue civil investigative demands, which are like subpoenas before we've filed a case. So we can send those to folks who are involved in the transaction, the payment processors, the banks, the telephone folks, everybody, but the scammer, him or herself, so that we can build up evidence about exactly where the money is going, who's behind it, and then we can go to court without the other side's knowledge that's called an ex parte filing. We can ask for a temporary restraining order and say, just shut it down and freeze all the assets because otherwise they might get hidden away, but we want to be able to return that money to consumers. We've been able to freeze many millions of dollars and return billions of dollars to consumers over the years. That's always our goal at the beginning of every single case. Marty Dulema from the University of Minnesota says one thing that is unusual about scam fighting is that it's a truly bipartisan issue. Everybody hates getting scams and are universally kind of united against scammers. So we're seeing some law enforcement efforts. Who cares most and least about stopping this? Do local and federal governments in those places try hard? Does the U.S. government try hard to go after scammers who are attacking American victims, etc.? Each government has had a different approach to targeting scammers. I would say that some countries are doing more than others. For example, I know that there's more activity happening in the U.K., in Australia, and in Singapore. The U.S. is starting to slowly ramp up its anti-scam efforts. Marty Dulema Why has it been slow? Marty Dulema Well, I would say that there hasn't been much international effort in stopping the flow of scams in the United States. It requires a tremendous amount of international collaboration and cooperation. It takes a lot of resources, and it seems like we're redirecting our FBI and other resources to other supposed issues. Marty Dulema So you said there are some countries that do more than others. What are some countries that do less than others? Marty Dulema We are one of those countries. Marty Dulema I thought you were going to point to Myanmar and Thailand. Marty Dulema Oh, yeah. Some of these countries with contested borders or where there's warring militia with the federal government or these military juntas, there has been a growth in the scam industry there because they're able to continue operations by offering bribes to whichever force has control over that contested area. Then there's other economies and whole countries with loose law enforcement like Ghana, where they just can't keep up with the prevalence of scam organizations there. Marty Dulema The federal trade commission, in addition to targeting the scammers themselves, is also paying more attention to the other players in this ecosystem. Here is Katie Daffin again. Katie Daffin We also are very focused on going after the people who are facilitating fraud because that is a very good effective way to use our limited resources. One example would be a recent case we brought against a payment processor named Paddle. We charge it with abusing the US credit card system and allowing deceptive operators and scammers to have access to that, to process consumer payments. In our complaint, we told a story that during the onboarding process for a new company that wanted to use Paddle to process people's payments, there was a Paddle risk and compliance employee who told Paddle's key executives about consumer complaints, alerting them to information that they may be running a scam and even circulating a link to see these detailed complaints. But we allege that nevertheless, Paddle not only approved the company to open up an account, but also offered discount service fees to incentivize it to send lots of processing volume over the Paddle network. So in that case, Paddle agreed to pay $5 million and to be permanently banned from processing payments for certain telemarketers. Regulators in the UK and Australia are pushing a more aggressive idea. They want to make the platform and telecom firms share legal responsibility for stopping scam messages before they land. Last year, Reuters reported that leaked documents from Metta, the parent company of Facebook and Instagram, show that 10% of Metta revenue comes from running ads for scams and banned items. We asked Katie Daffin if the FTC would bring charges against Metta. I cannot comment on any such questions, Ari. I asked Marty Dilema about this too. So when I look around at the ecosystem that the scammers use, it looks like Metta and Facebook is a pretty big platform. It almost feels like it's the perfect silent partner in the scamming ecosystem. They reportedly show their users about 15 billion scam ads a day. What would you suggest be done about that? I'm really glad that you mentioned that because I think this is where the true solutions lie. It's not about just educating the consumer. It's not about just shoring up the targets because scams are going to change and consumers are always going to change. We need to do more at the legislative level so that companies like social media companies, telecoms, that they take more action in preventing the scam messages from getting to us in the first place. And how hard would that be for them? How hard would that be for Facebook, for instance? The technical capacity of these companies to identify and flag scams is there. I think what we saw with the recent meta-leak about the profits that they make from these scam ads really shows that they're making a calculated choice to either show and host known false and fraudulent ads or not. So the technical capabilities of taking those fake profiles down is there. In fact, one of the most heartbreaking things that I hear from victims is how the scammer that has been targeting them and harassing them for years will create a new fake profile and continue to harass and target them. And no matter how many times they report that profile as fake to meta or to other platforms, it doesn't get taken down. So if you were speaking right now to Mark Zuckerberg and not me, what would you say? I would say that his company and the other social media companies have a really important role to play in preventing the global devastation caused by scams. And I think a lot of this comes down to the fact that we still blame the victim. Some of these companies say, well, they're choosing to believe this information and they have to do their own due diligence. That's not our job. And if they pay money, that's on them. And that message is so internalized. When I talk to people who've been victims of scams, I ask them, who do you blame? And after the scammers, thankfully the scammers are first, they blame themselves. They do not blame the structures that have allowed the crime to happen. Do you have a checklist for how to avoid scams? My checklist is to treat every unsolicited communication with a grain of salt, to independently validate the information, so not using the phone number or the information on like an invoice. I've actually missed a number of legitimate communications because I thought it was a scam. This is the world that we're now in. What kind of things did you miss? I was supposed to take some cybersecurity training and I just kept missing the deadline until I got a call from my supervisor that said, you're on my list for not completing your cybersecurity training. And I'm like, are you kidding me? That looked just like a scam. We reached out to Metta to confirm the Reuters reporting we mentioned. They said, quote, aggressively fighting scams is one of our top priorities. And that last year alone, we took down 10.9 million Facebook and Instagram accounts linked to criminal scam centers. Like to say thanks to all our guests today, Marty Dlima, Katie Daffin, and Mark Frank. And thanks especially to you for listening. If you want to let us know what you thought about this episode, our email is radio at freakonomics.com. If you have a scam story you'd like to tell us, we'd love to hear it. Coming up next time on the show, our friends from the search engine podcast dropped by to teach us about the history of the self-driving car. I had experiences of losing people in my life to traffic accidents. And I felt, wouldn't it be amazing if Gapa invented something that would save a million lives a year? And the political fights around the legalization of self-driving cars. Getting driven around by a robot or just not even a robot. Some of these don't even have a little head. That's even creepier. So that was like, yeah, no. That's next time on the show. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Renbud Radio. You can find our entire archive on any app also at freakonomics.com where we publish transcripts and show notes. This episode was produced by Zach Lipinski and edited by Ellen Frankman. It was mixed by Eleanor Osborn with help from Jeremy Johnston. The Freakonomics Radio network staff also includes Augusta Chapman, Dalvin Aboulagi, Elsa Hernandez, Gabriel Roth, Ilaria Montenacourt, Jasmine Klinger, and Theo Jacobs. Our theme song is Mr. Fortune by the Hitchhikers and our composer is Luis Guerra. Just on the chance that this Yamaha baby grand thing is real, do you want to go in with me on the shipping cost and I'll let you play the piano whenever you want? No, I am not in the market. The Freakonomics Radio network, the hidden side of everything.