Technology companies spanning payments, crypto, and even dating sites are teaming up to fight fraud. A newly formed organization, Tech Against Scams, will serve as a central hub where these companies can collaborate on strategies to combat scammers, protect consumers, and disrupt rapidly evolving financial scams.
The coalition includes Coinbase, Match Group (parent company of Tinder and Hinge), Meta, Kraken, Ripple, and Gemini.
Ongoing fraudulent activities represent a growing problem. According to the Federal Trade Commission, consumers lost more than $10 billion to scams last year, with those originating on social media accounting for the highest total losses at $1.4 billion. Social media and other predominantly online organizations recognize that their customers need to feel secure, especially when sending money around the world.
“Scams are a global crisis, and we can no longer afford to just watch as they devastate millions of people around the globe,” said Jennifer Pitt, Senior Analyst in the Fraud & Security division of Javelin Strategy & Research. “I applaud those organizations who are working together to tackle this rampant fraud and scams problem. This is long overdue. We can no longer fight this battle within silos. We have to work together—consumers, financial institutions, cryptocurrency firms, law enforcement, tech companies, social media platforms, and telecommunications providers.”
Focus on Pig Butchering
The Global Anti-Scam Organization, founded in 2021 after its founder fell victim to a pig butchering scam in China, is also part of the team. In pig butchering, a scammer with a fake social media account tries to convince a victim to invest their money in a fake crypto transaction. The “pig” gets stuffed over several weeks, watching the apparent growth of their investment, which encourages them to invest even more money.
In addition to sophisticated psychological tricks, pig butchering scammers also use technical tactics to avoid detection, such as using VPNs or relying on social media platforms without robust fraud detection processes. These complex methods are a big part of the reason that cooperation is needed in this area.
“We need to share information about specific scam typologies, methodologies, and tactics,” Pitt said. “We need to get better at educating consumers on scam prevention methods and red flags, so they will be prepared when scammers try to manipulate them. And finally, we all must ensure that victims know it’s not their fault; they were targeted by predators who are very good at manipulating people.”