Inside the Pig Butchering Scam: What It Is and How to Avoid It

Phishing. Pharming. Romance Scams. Charity Scams. Ransomware. Student Loan Forgiveness Scams. By now, we’re all aware of some or most of these scams. Many of us have even been targeted. Remember the Nigerian scam that asked for “advanced funds?” That scam, and others, pre-date the internet by decades or even centuries.

But the internet, while life-changing in many positive ways, also makes it very easy for experienced and seasoned criminals to get their hands on your money.

There are obviously dozens more of these scams, created by ne’er do wells aimed at duping innocent victims to provide account funds or the access to those funds.

One of the more recent online fraud strategies is “pig butchering.” The name’s origin comes from a Chinese phrase that approximates “from tale to snout.” Similar to its origin, the cyber fraud version refers to using all of the resources of the victim.

Generally, the scammer gets victims to invest in supposedly legitimate virtual currency investment opportunities before being cheated out of their money. Scammers even refer to victims as “pigs” and often use fictitious identities and elaborate storylines to “fatten up” the victim into believing they are in trusted partnerships before they defraud the victims of their assets, thus the “butchering.”

How Pig Butchering Works

Pig-butchering scammers deceive victims by carefully taking them through several steps to make them feel comfortable. A commonality is a victim who has a fair amount of financial assets, and desires more. These scammers often go through the following progression:

1. The scammers initially represent themselves as investment professionals or seasoned investors to gain the trust of their victim. They may also leverage the victim’s desire for romance or companionship as another way of developing trust. This initial contact is often made through random texts/emails where the scammers send a “wrong number” text to a customer and try to start a conversation.
2. Once trust is established, a promising investment opportunity is proposed. This often involves cryptocurrencies or other financial instruments. There is typically inflated investment returns and a sense of urgency to get the victim to invest.
3. Once the victim is ready to invest, collection is often done through digital payment platforms or cryptocurrencies to make it difficult to track the money back to the scammer.
4. Once scammers receive a substantial amount of money from victims, they will often create fake statements showing healthy returns and in some cases, will even return funds at the beginning to show good faith. Once the funds are depleted, the scammers are suddenly unable to be reached and/or the platform will be unable to transfer the requested funds to the victim.

Each of these steps is carefully executed to bring victims closer to agreeing to invest and transfer funds.

So, what can you do to counter the risk of falling prey to these scams

The following recommendations are provided by the FBI to help potential victims understand the warning signs of these types of scams and how to take action when possible:

• If an unknown individual contacts you, do not release any financial or personal identifying information (PII) and do not send any money.
• Do not invest per the advice of someone you meet solely online.
• Confirm the validity of any investment opportunity or cryptocurrency investment website or app.
• If you already invested funds and believe you are a victim of a scheme, do not pay any additional fees or taxes to withdraw your money.
• Do not pay for services that claim to be able to recover lost funds.

The FBI requests victims report these types of fraudulent or suspicious activities to the FBI IC3 at www.ic3.gov.

A great rule of thumb to go by: any time someone tells you to lie to your bank or your family, it is fraud. There are times a scammer will ask you to lie to your bank about the reasons for a wire transfer or large check. Always be truthful with your bank so that they can help protect your valuable assets.

Stay up to-to-date on common scams and ways to protect yourself by learning questions we will never ask you. For more information about security and ways to protect yourself, check out the Security Section of our Learning Center or our Personal Security Center.