Jump to:
- How Common Are Pig Butchering Scams?
- What Happens in a Pig Butchering Scam?
- Warning Signs of a Pig Butchering Scam
- What to Do if You’ve Been Scammed
- More Ways to Keep Your Money Safe
It’s the investment scam with the unusual name – and it has nothing to do with barbecue.
Pig butchering scams are based on the practice of fattening a hog before slaughtering the animal for its meat.
In the first stage – known as “fattening the pig” – the scammer cultivates a relationship to earn the victim’s trust. This often takes place through social media, dating apps or text messaging. The “butchering” stage begins when the scammer persuades the victim to invest in phony assets, which the scammer can then access.
According to the FBI, losses from investment scams, including pig butchering schemes, increased by 38% to reach $4.57 billion in 2023. A staggering 90% of losses were tied to cryptocurrency. A 2022 survey of 550 pig butchering victims found that 77% had drained their bank accounts completely, with an average loss of $210,000.
This article takes you through a summary of pig butchering scams, including how they operate, red flags to watch out for and what to do if it happens to you.
How Common Are Pig Butchering Scams?
A 2024 study from researchers at the University of Texas at Austin offers details on the prevalence and reach of pig butchering schemes. Authors John Griffin and Kevin Mei traced the flow of funds from victims to scammers over a four-year period from January 2020 to February 2024. According to the authors, criminal networks stole more than $75 billion during that time.
In most cases, those who send the phony messages are themselves victims of human trafficking. The United Nations estimates that over 200,000 people are held as forced scammers, predominantly in Southeast Asia, lured by false promises of job opportunities.
Scammers establish contact with unsuspecting individuals, then persuade them to contribute large sums of money to fake investments. Once the victim deposits the desired amount, the scammer collects the funds, disables the victim’s account and disappears. Individual losses can range from hundreds of thousands to millions of dollars. Stolen funds are often placed in cryptocurrency exchanges or converted to cash
What Happens in a Pig Butchering Scam
A pig butchering scam unfolds in three distinctive steps:
- Building a relationship with the victim, or “fattening the pig.”
- Persuading the victim to make phony investments, or “butchering the pig.”
- The disappearing act.
Scammer Builds Relationship with Victim (Fattening the Pig)
The scammer creates a phony online persona, often using AI-generated photos and fabricated backstories to appear convincing. Scammers often present themselves as successful investors or attractive singles on dating apps. They cast a wide net and contact several prospects to ensure a greater number of victims. Once the scammer identifies a potential victim, they establish contact.
The scammer rarely talks about money at first. Instead, they show an interest in the victim’s life and share personal stories to build a sense of intimacy. “Mirroring” techniques are used to match the victim’s interests or hobbies. The scammer often feigns romantic interest and may even exchange gifts with the victim.
Scammer Promotes Phony Investments (Butchering the Pig)
Once the desired level of trust is established, the scammer begins dropping investment ideas into the conversation. They might tell the victim how they just earned a large return from a new financial app they just discovered.
The goal is to persuade the victim to download the same app to their phone and put money into the investment. Phony investments are often presented as a new cryptocurrency exchange or foreign exchange opportunity.
The initial deposit is often a small one. Phony reports convince the victim that the balance is growing. The victim may even be allowed to withdraw cash in order to maintain trust and keep up the guise of legitimacy.
Scammer Disappears
Once the victim contributes the desired amount, the scammer withdraws the funds for themselves. Then they suddenly cut off all contact and disable the fraudulent app so the victim has no way to access their money or find the scammer.
Warning Signs of a Pig Butchering Scam
Although a pig butchering scam can happen to anyone, knowing the red flags can lower your risk. Here are the warning signs to watch out for.
- Unsolicited contacts: Be suspicious of friend requests from unknown persons or text messages from anyone you don’t know. If you use a dating app, verify that a potential match is a real person before responding.
- Too-good-to-be-true investments: Any investment that promises big returns with little or no risk is most likely unrealistic. Research the opportunity thoroughly and talk to a trusted financial advisor before you proceed.
- Romantic interest or information requests: Make sure a potential romantic partner is who they say they are before establishing a relationship. Don’t share personal or financial information with unverified individuals.
- Unfamiliar investment apps: The fraudulent apps used in pig butchering schemes are available on familiar app stores to give the appearance of legitimacy. Do your own research or talk to a financial advisor to be sure that it is real.
- Confusing information or difficulty withdrawing funds: A trustworthy investment should have detailed information available, including easy steps for accessing your money.
What to Do if You’ve Been Scammed
Even after taking precautions, many people still find themselves the victims of investment scams, such as the pig butchering scam. If you realize you’ve been hit, take the following steps.
- Stop all contact with the scammer immediately.
- Halt all payments to the phony app.
- Notify your bank or broker about the scam.
- Notify local law enforcement.
- File a report with the FBI’s Internet Crime Complaint Center.
- Gather as much documentation as you can. This includes contacts with the scammer and financial records pertaining to the phony investment.
More Ways to Keep Your Money Safe
Investment scams and other forms of fraud can empty your savings and keep you from reaching your financial goals. That’s why Community Point Bank takes your security seriously. From identity theft to fraudulent calls, our team monitors and identifies suspicious activity to protect you and your money. Contact or visit a Community Point Bank location today.
