Policy State of Play: Online fraud in Southeast Asia 

With the Global Fraud Summit (March 2024) as context, the Southeast Asia Public Policy Institute has published a Policy State of Play looking at the state of fraud and scams in Southeast Asia with a focus on policies and initiatives to stop online fraud. You can also find below a short summary of the briefing.

You can download the report here

Executive Summary: Policy State of Play – Online fraud in Southeast Asia

Over the last decade, Southeast Asia has earned a reputation for being a hub of online fraud and scam operations. According to a report by the UN Office on Drugs and Crimes (UNODC), profits from the scam industry in just one Mekong nation in 2021 was estimated to be between US$7.5 and US$12.5 billion.^[1]

Recognizing the significance of the issue, ASEAN leaders pledged to crackdown on online fraud operations – with a focus on those run by human traffickers – during the 42^nd ASEAN Summit in May 2023.^[2] ASEAN has established a number of mechanisms to facilitate high-level discussions, enhance information and knowledge exchange, build capacity for law enforcement officials, and promote cooperation with external partners. ASEAN is also cooperating with other organizations such as INTERPOL and the UNODC to tackle cybercrime.

Across the region, the growth of online scam and fraud cases has made it a major political issue, driving governments to act urgently and introduce new safeguards for citizens. From a legislative standpoint, most countries in Southeast Asia have already passed, or are moving towards introducing new legislation to combat scams. The following provides a brief overview of regulatory and policy developments in the different Southeast Asian countries.

• Singapore – the government is highly active, working with industry players including financial institutions and e-commerce through initiatives such as the Anti-Scam Command (ASCom). The government is looking at a Shared Responsibility Framework (SRF) that may introduce obligations on financial institutions and telcos to share the liability of scams.
• Malaysia – the government is developing its approach which will include new legislation to safeguard digital security, imposing penalties on financial institutions if they fail to implement appropriate measures to mitigate scams.
• Thailand – new measures will place significant focus on providing consumers with ability to report and freeze their bank accounts and transactions if they suspect they have been a victim of fraud.
• Vietnam –the government is focusing on introducing legislation to strengthen data security to prevent consumer data from being accessed and exploited by scammers, as well as moving to phase-out 2G networks which more vulnerable to exploitation.
• Philippines – to address regulatory gaps hindering the response to emergent threats, the government will pass new legislation criminalizing acts such as being a money mule or committing social engineering schemes. The bill may also impose more obligations on financial institutions to protect their customers.
• Indonesia – the government is introducing a new platform that enables the public to report numbers that are suspected to be used for scams to be blocked. The government is also actively trying to block online trading and investment platforms that fail to comply with current laws and have been found to be fraudulent.
• Cambodia – the government has come under significant international pressure to deal with scam operators within its territory including from Thailand and China, though issues persist with scammers simply moving elsewhere in Cambodia or to neighbouring Laos or Myanmar.
• Laos – the government is cooperating with international and Chinese law enforcement as well as looking into establishing greater government oversight of special economic zones which play a significant role in hosting scam operations.
• Myanmar – The current ongoing civil conflict and the breakdown of the rule of law in many areas in Myanmar poses a significant obstacle to meaningful regional action against scam operations. The military government has come under increased pressure from China to act against the scam rings which have been targeting Chinese citizens.

Online fraud and scams are yet another area where the diversity of Southeast Asia’s economies creates a wide range of challenges. High income markets, such as Singapore, are primarily targets for scammers, while areas with security challenges and limited enforcement capacity host scam operations, with a different set of victims implicated.

However, the issue is front of mind for governments in the region, given its direct impact on citizens, links to organized crime, and international attention. Hence, it has become an area of significant legislative activity for almost every government in the region. It is imperative that legislative developments create an effective landscape for addressing online fraud, and that Southeast Asia has a seat at the table for global discussions aimed at cooperation to combat the global scam industry.

About the Southeast Asia Public Policy Institute 

The Southeast Asia Public Policy Institute is a research institute based in Bangkok and Singapore, working across the region. Our mission is to support the development of solutions to the most pressing public policy challenges facing Southeast Asia in the 21st century. The Institute undertakes in-depth research to develop actionable policy solutions on a range of issues across sustainability, technology, public health, trade, and governance. We convene dialogues with stakeholders and decisionmakers to drive discussion on the challenges and opportunities facing markets across the region. The Institute draws on a network of in-market researchers, advisors, and partners to provide insights and recommendations for governments, policymakers, and businesses. 

[1] https://www.unodc.org/roseap/uploads/documents/Publications/2023/TiP_for_FC_Policy_Report.pdf, p.2; 20.

[2] https://asean2023.id/storage/news/ASEAN%20Leaders%20Declaration%20on%20Combating%20TIP%20Caused%20by%20Abuse%20of%20Technology.pdf.