Criminal gangs based in China have raked in more than $1 billion over the past three years by bombarding Americans with scam text messages, according to the Department of Homeland Security. The messages, often posing as overdue toll or postal fee notices, aim to trick recipients into handing over credit-card details. Once obtained, the information is used to buy iPhones, gift cards, and other goods, or is laundered through complex schemes that exploit digital wallets and gig workers in the US, reports the Wall Street Journal. The scale of the problem is growing: Americans reported a record 330,000 toll-scam texts in a single day last month, and monthly volumes are now triple what they were at the start of the year.
The scam's backbone is a shadowy black market linking foreign networks to "SIM farms"—rooms filled with devices that use hundreds of SIM cards to send thousands of texts at once. These farms are often set up in shared offices or other inconspicuous locations across US cities, including Houston, Los Angeles, and Miami. The scam process typically begins with a phishing text directing victims to a fake payment site, where scammers capture financial information. A key innovation driving the fraud is the ability to install stolen credit card numbers into Google and Apple Wallets in Asia and then remotely share them with US-based shoppers, per the Journal.
This allows criminals to sidestep multi-factor authentication, making tap-to-pay purchases that are nearly impossible for banks to distinguish from legitimate transactions. Gig workers, recruited via messaging apps like WeChat, are paid small fees to help run the operations or use stolen card data to make purchases. They're reportedly paid as little as 12 cents for every $100 gift card they buy. The goods are frequently resold in China, funneling profits back to organized crime groups. Authorities have begun to make arrests—one Chinese national recently pleaded guilty to using more than 100 stolen card numbers to buy gift cards in Kentucky—but the volume and sophistication of the scams continue to rise.