Criminal gangs in China stole over $1 billion from Americans with SMS scam: how they did it and how you can stay safe

Chinese criminal gangs have reportedly stolen more than 1 billion dollars from American victims through sophisticated “smishing” scams. They trick their victims by sending fraudulent text messages that prompt recipients to reveal sensitive information.

According to the Department of Homeland Security, these operations rely on SIM farms and claim to represent government or financial institutions. These SIM farms basically store networks of automated SIM cards that can send thousands of messages at once.

Once the victims click on these malicious links, their personal details, such as passwords and other financial information, are stolen through fake websites. These personal details are then uploaded to digital wallets such as Apple Wallet or Google Wallet in Asia. They are linked to US-based gig workers, who unknowingly use the compromised accounts to buy iPhones, gift cards, and other goods that are shipped back to China.

The Homeland Security estimates the scheme has generated more than $1 billion in illicit profits.

A group of researchers who have been observing this trend describe the operation as a highly organized crime. They detected over 330,000 such scam messages in a single day just last month, which is roughly three times the number seen at the start of the year.

These scammers are taking advantage of the ease of online shopping while hiding behind the anonymity of digital payment systems. The FBI said they received nearly 60,000 complaints about such scams last year, with new versions coming up almost every week.

Experts warn that this wave of smishing shows an expanding cybercrime network. One factor encouraging its rapid expansion is cheap tech tools and encrypted messaging apps. Criminals now sell ready-made scam kits on Telegram, making it easier for others to copy their methods.

The best way for phone users to protect themselves is to avoid clicking on links from strange numbers and to confirm all payment requests through official websites. While addressing the issue, Brian Schwalb, Attorney General of the District of Columbia, urged residents to “ignore these texts and immediately file a complaint with the FTC”. However, being aware of these evolving tactics is key to staying ahead of digital fraud.