Countering Digital Scams: Why Digital Trust Is Now a Development Priority
A new Issue Brief by the United Nations Development Programme (UNDP) warns that digital scams have evolved into a major global development challenge costing the world up to $1 trillion annually and threatening trust in digital systems that underpin modern economies.
As countries accelerate digital transformation, expanding digital payments, digital public infrastructure (DPI), mobile banking, and online government services, scammers are exploiting new vulnerabilities. The result is not only financial loss, but emotional harm, erosion of public trust, and potential setbacks to sustainable development progress.
Why Digital Scams Matter for Development
Digital technologies now support more than 70% of the Sustainable Development Goals (SDGs). However, the rapid expansion of digital access has also widened the “attack surface” for scams.
Digital scams, including investment fraud, romance scams, employment scams, impersonation schemes, and fake charity drives, manipulate victims into transferring funds or disclosing sensitive information. Increasingly, these scams rely on social engineering, impersonation, and AI-enabled tools.
The impact extends far beyond money:
- Developing countries lose up to 3–4% of GDP to scams (with some losing up to 10–11%).
- Trust in digital platforms declines sharply after scam exposure.
- Victims experience emotional and psychological harm.
- Scam centres fuel organised crime and human trafficking networks.
For developing countries where digital adoption is accelerating, but institutional safeguards may lag, the risks are especially acute.
Four Trends Accelerating Digital Scams
1. Rapid Digitalisation
Nearly six billion people are now online. Digital payments, mobile money, and digital public infrastructure are expanding financial inclusion and service delivery.
However, rapid digitisation without matching investments in safety creates vulnerabilities, particularly for first-time users unfamiliar with digital risks.
2. AI Is Turbocharging Scams
Artificial intelligence has dramatically lowered the cost of becoming a scammer. AI is now used across the scam lifecycle:
- Identifying and profiling targets
- Generating personalised scam messages
- Creating deepfake audio and video
- Automating outreach at scale
- Laundering funds via cryptocurrency
While AI also strengthens detection tools, offensive capabilities currently outpace defensive systems, particularly in developing countries.
3. Scammers “Leave No One Behind”
Scams are no longer limited to specific age groups or regions:
- 57% of people across 42 countries encountered a scam in the past year.
- Exposure is especially high in Africa and South America.
- Younger generations (Gen Z and Millennials) are more likely to lose money, despite higher digital confidence.
- Underreporting remains widespread due to stigma and weak reporting systems.
Digital literacy gaps amplify the risk.
4. Declining Trust and Economic Precarity
Low institutional trust, youth unemployment, economic uncertainty, and rising loneliness create fertile ground for manipulation. “Get rich quick” schemes and romance scams thrive in such environments.
What Needs to Be Done?
The UNDP argues that countering digital scams requires a whole-of-society, lifecycle approach, covering:
- Pre-scam prevention: Digital literacy, cyber hygiene, public awareness
- During-scam detection and disruption: Blocking malicious links, transaction verification steps
- Post-scam response: Reporting systems, victim support, enforcement, and intelligence sharing
No single actor can solve this alone. Governments, banks, digital platforms, law enforcement, and civil society must coordinate efforts and share data.
Technology must also be part of the solution. AI can strengthen scam detection, predictive modelling, and fraud prevention, but safeguards must protect rights, privacy, and accountability.
Four Priorities for Developing Countries
UNDP highlights four urgent areas for action:
- Better data and insights on scam impacts in developing contexts
- Elevating scams as a policy priority at national and regional levels
- Identifying and scaling effective practices tailored to local realities
- Investing in horizon scanning and anticipatory capacity to stay ahead of evolving tactics
Through its digital transformation framework, DPI Safeguards Initiative, and AI Trust and Safety programmes, UNDP aims to help countries move from reactive enforcement to integrated, preventative action.
Conclusion: Protecting Digital Trust Is Protecting Development
Digital scams are not merely a cybersecurity issue; they are a development challenge.
Left unaddressed, they risk undermining financial inclusion, digital public infrastructure, and trust in institutions. But with coordinated action, stronger safeguards, and proactive collaboration, countries can build safer digital ecosystems that support inclusive growth and sustainable development.
Digital transformation must be secure, trusted, and resilient or development gains risk being reversed.