Chinese crime rings made over $1 billion spamming American phones with text scams

Criminal groups based in China have made more than $1 billion from text message scams targeting Americans, according to the Department of Homeland Security.

The scam texts claim to be from agencies like the U.S. Postal Service or state toll authorities, warning about unpaid fees or overdue bills. Once victims click the links, they’re taken to phishing websites designed to steal credit card information.

Investigators say the stolen data is used to buy iPhones, gift cards, and luxury goods, often resold in China.

Massive network of SIM farms and phishing sites

The messages are powered by large-scale “SIM farms,” which are rooms filled with devices packed with hundreds of SIM cards. They’re capable of sending millions of texts each day. Homeland Security officials say at least 200 SIM boxes are active across 38 sites in cities including Houston, Los Angeles, Phoenix, and Miami.

One Homeland Security agent said a single operator using a SIM farm can send as many messages as 1,000 phone numbers combined. Many of these U.S.-based setups are run by gig workers recruited through the WeChat app.

The phishing sites used in the scam mimic official payment portals, asking users to enter personal and financial details. Once collected, the information is installed into Apple and Google Wallets in Asia, allowing criminals to make purchases remotely.

Cybersecurity firm Proofpoint says Americans reported a record 330,000 toll-related scam messages in a single day in September. The average monthly volume of these texts is now more than triple what it was at the start of 2024.

Homeland Security investigators estimate 400 to 500 U.S. gig workers are used daily to spend stolen funds, earning just cents per $100 gift card purchased.

Authorities have already made arrests linked to the operation. In one case, Chinese national Heng Yin pleaded guilty in August to wire fraud and identity theft in Kentucky after using more than 100 stolen card numbers to buy gift cards through his phone’s Tap-to-Pay feature. He’s set to be sentenced next month.