Martha Mendoza: Scamming is about as old as human interaction. So, there have been, you know, scams as long as we've been around as human beings. However, it was really during COVID when people began shifting their trust, emotions, financial dealings, shopping, relationships, intensely online. Clearly, we've been online for decades prior to that, but COVID was a big shift.
At the same time, casinos in Southeast Asia were shut down and began being staffed by people who were human trafficked into these jobs and they were scamming people. And so, it became this industrialized transnational organized crime. If you think about it, it's going to be on par with drug trafficking at some point soon in terms of the dollar amounts.
So more than $150 billion industry. It's a massive criminal industry now. And these criminal groups are operating these large compounds. They use scripted psychological techniques and specialized workforces to target people all around the world at enormous scale.
Patrick Center: What are some of the techniques that they use?
Martha Mendoza: Interestingly enough, I got to know somebody online who was inside of a scam compound, and he one day leaked to me thousands and thousands of documents that they were using inside and some of the document’s titles were emotional manipulation, which is exactly what happens. But there's time pressures on people who are being scammed. You have to do this right now. There's keeping it secret. That's also a big red flag for someone. If they're being told, don't tell anyone about this, that's likely to be a scam. And finally, they prey on people's loneliness and emotions, and everybody wants to be liked, and everyone wants to be admired, and they use very basic techniques to get to people to engage and trust them.
Things like send me your picture of your breakfast, Patrick, and I'll send you a picture of my breakfast. I can't tell you how many of the scam scripts had photos of people's meals going back and forth, this type of mirroring. So, tell me about when you lost someone. I'm going to share when I lost someone. The problem is the person at the other end of this scam is a made-up written biography that is being passed from one shift to the next by these people who are being forced to scam you. So, it's very hard to get out of this romantic attachment, trust, the fear, the urgency, and also the desire for quick money or big money, which is offered.
Patrick Center: And everyone is susceptible.
Martha Mendoza: Yeah, when I have talked to, well, I have my own. young adult children, but when I talk to them, their friends, or even college students, the amount of them who have been taken by a scam is very high. And it's not going to be a huge life savings like an elderly person, but it will be that they bought tickets for a concert on Facebook Marketplace and then the person ghosted them. So, they too lose their whole summer savings to a ticket that didn't show up.
It's also financial advisors. It's also lawyers, doctors, very well-educated computer engineers we interviewed who had lost great deals of money to scams. I sat in a courtroom where there was a bank president who gave away all his money, he gave away the church's treasury money, he gave away his daughter's college fund, and then in just a handful of transfers gave away all the money in the bank. It's really important people understand that these are not stupid people or elderly people who can't keep track of things. These are all of us, all of us are vulnerable to this.
Patrick Center: The assumption is that there is someone out there regulating all of this and that my losses will be reinstated some way, somehow. You're seeing around the globe that different countries are handling it differently. So, let's start there and then we can talk about how the U.S. is approaching this.
Martha Mendoza: There are a couple of countries that are making strides on this. In the United Kingdom, for example, if you want to transfer money from your bank account into a different account or cryptocurrency, you're going to have quite a delay. The bank's going to call you and have a conversation with you. And in Australia, there are a lot of limits now on fake profiles so that social media platforms are. restricted and fined if there's fake profiles put up. Singapore is very, very strict about this, as is China, where the penalties can be very severe. That said, most countries in the world do not have as strict limitations. The EU-wide, there's stricter social media limitations as well.
But here in the United States, think about this, Patrick, if your car is stolen from the front of your house, you'd probably call the police and they probably would show up and help you get your car back or at least look for it. But if you called the police and said, I just moved my entire 401k into a crypto account with someone I trusted and now they've disappeared and I'm realizing I think I was scammed. The police don't have resources to do a blockchain tracking, to get a federal judge to freeze a crypto wallet. There's no system in place for this. And I should add that cryptocurrency is increasingly unregulated in this country. And so that is harder to chase.
And at the same time, we have this growing powerful AI so that I talked to scammers who would in a day, you know, set up 15 fake profiles. And now using AI can set up 50, 100 or more in one day. And so, between those two waves, crypto and AI, we really are just ever more vulnerable.
Patrick Center: Is there a policy that's being formulated to confront this?
Martha Mendoza: Well, if you look at what Congress has proposed, you know, going back five years, there was no law being proposed this year. think there was, I think seven or eight. And so, Congress is trying to move to pass something, but they have not pushed anything all the way through. It is quite a bipartisan issue, because if you think about it, you know, there's no politics and getting scammed. However, it becomes bipartisan when you talk about regulating social media or cryptocurrency or artificial intelligence.
Patrick Center: What is banking's role in policing?
Martha Mendoza: Honestly, I think that our nation's bank tellers are the hero story in this because very often someone is going to their bank with great urgency and saying, I need to take my money out. Lots of it that I never have before. And it's the bank tellers who are saying, calm down, sit down. I'm going to get you some water and let's talk about it. This is not their mission as a bank teller, nor are they, you know, social workers. And yet they are the front lines as well as financial advisors.
But the banks at this point are not liable. So, in the UK, you know, you're asking about other countries, banks are also liable. If somebody is scammed and they take their money out of the bank, the bank has to reimburse them. There's nothing like that here, although there are some state laws. California has some laws that protect elderly people, and so some people have tried to those laws.
The bottom line is, if you transfer your money out of your bank account, that is on you, even if you are in the midst of a very long situation where you've been groomed over weeks or months with scammers mirroring your interests and building this authentic relationship and then introducing an investment scheme. Nonetheless, if you take your money out of your bank account, there's not a lot of recourse for you.
Patrick Center: You mentioned you have young adult children. What do you tell people? What do you tell them? What do you tell your neighbor? What to look out for and how to be careful navigating numerous platforms and now the introduction of AI.
Martha Mendoza: I tell people don't engage with strangers on texts or online. Get to know people who you are able to go see and be with. But more than that, I tell them about the red flags of the scam.
If somebody is building an urgency that you must do anything right away, aside from, you know, getting to the ER to see someone, there's no point in that. And so, take a moment and pause. Ask somebody. And I also think it's really important that teenagers, young adults, if you do find yourself in the midst of a sextorsion scam where somebody has convinced you to share nude pictures of yourself, it still can work out. This still can be brought back together, and parents whose kids are in the middle of those situations really need to stay calm and help them and support them. So, I think the, my big thing is don't freak out. You can sort this out and don't transfer your money to someone you don't in-person really know.
Patrick Center: The Associated Press and Frontline present Scammed. It airs at nine o'clock this evening on WGVU Public Television reporter Martha Mendoza. Fantastic work. Thank you so much for your time.
Martha Mendoza: Thank you, Patrick. I hope everyone has a good day out there.