Every year, people around the world lose millions of dollars to a sophisticated scam known as “the pig butchering romance scam”.
The Pig Butchering Scam (also known as “Sha Zhu Pan” 殺豬盤／杀猪盘 or “slaughtering the pig”) is a type of financial scam that originated in China and has since spread globally. It is a long-con romance and investment scam where the victim (referred to as the “pig”) is “fattened up” emotionally and psychologically by the scammer over time before being “butchered,” meaning they are coerced into investing large sums of money into fake investment schemes.
How the Scam Works:
- Initial Contact and Relationship Building:
- Scammers typically approach victims through dating apps, social media, or cold messaging on platforms like WhatsApp.
- They spend weeks or months building a fake relationship, gaining the victim’s trust by pretending to be romantically interested, showing care, or posing as a friend.
- Introducing the Fake Investment:
- Once trust is established, the scammer introduces the victim to a fake investment opportunity. This could be a cryptocurrency investment, forex trading, or any high-return scheme.
- The scammer shows supposed “evidence” of their own profits and convinces the victim that they, too, can make money quickly.
- Small Returns to Gain Trust:
- Victims are often persuaded to invest a small initial amount, and the scammer may provide fake returns to make the investment seem legitimate and lucrative.
- This initial success motivates the victim to invest more money.
- The Big Loss – Butchering the Pig:
- Once the victim has invested a large sum, the scammer disappears with the money or prevents the victim from withdrawing their funds.
- The victim is left with no access to their “investment,” which in reality never existed.
Characteristics of the Scam:
- Long-term Manipulation: The scam takes time, as the scammer “fattens up” the victim by developing a deep emotional connection.
- High Returns Promised: Victims are usually promised high or guaranteed returns, making the scam seem like a “once in a lifetime” opportunity.
- Use of Fake Investment Platforms: The scam often involves convincing the victim to invest through fake websites or apps that appear legitimate, complete with customer support and live dashboards to show false profits.
- Withdrawal Blockage: When the victim tries to withdraw their funds, they may be told there are “fees” or “taxes” to pay, which are just tactics to extract more money before the scammer vanishes.
How to Avoid Pig Butchering Scams:
- Be Wary of Strangers Online: Be cautious about people who approach you on dating apps or social media, especially if they bring up financial opportunities.
- Do Not Share Personal Information: Avoid sharing sensitive personal details or financial information with people you haven’t met in person.
- Research Investment Opportunities Thoroughly: If someone suggests an investment platform, research it thoroughly. Be skeptical of high returns or “no risk” opportunities.
- Avoid Transferring Money Quickly: Do not send money to someone you just met online or invest in schemes you don’t fully understand.
The Pig Butchering Scam is a sophisticated, emotionally manipulative con, preying on vulnerable individuals who trust the scammer. By being aware of the tactics used, you can better protect yourself and others from falling victim to this type of fraud.
The scam takes its name from the victims, who the scammers call “pigs” that they “fatten up” before slaughter. It usually begins with a text message that appears to be a wrong number. People who respond are lured into a long conversation with a good-looking and wealthy stranger who eventually offers to teach them how to make money with crypto investments. The investments are (of course) fake, and once victims send enough of their money, the scammers disappear. Victims frequently lose their life savings, and often the crime goes unreported because the victim is so embarrassed by what happened. A Kansas banker embezzled almost $50 million dollars from his bank as part of a pig-butchering scam, leading to the bank’s failure.
List of Common Terms
Investors need to understand the common terms related to Pig Butchering scams in order to protect themselves from being financially victimized.
- Cryptocurrency – A digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.
- Dating Apps – An application that enables people to meet for a date and possible lasting relationship (i.e., Tinder, Bumble, eHarmony).
- Emotions – A natural instinctive state of mind deriving from one’s circumstances, mood, or relationships with others.
- Encrypted messaging applications – Provide end-to-end encryption for user-to-user text
- messaging. Encrypted messaging prevents anyone from monitoring your text conversations.
- Fake Profiles – A profile where someone is pretending to be something or someone that doesn’t exist.
- Fake trading platform – Binary options trading platforms manipulate the trading software to distort binary options prices and payouts. For example, when a customer’s trade is “winning,” the countdown to expiration is extended arbitrarily until the trade becomes a loss.
- Investing scam – Happens when people try to trick you into investing money. A scammer may lie to you or give you fake information about a real investment.
- Love Bombing – The action or practice of lavishing someone with attention or affection, especially to influence or manipulate them.
- Manipulation – To control or play upon by artful, unfair, or insidious means especially to one’s own advantage.
The Red Flags
- Out of the blue text message from wrong number.
- Builds a relationship over time.
- Encourages potential victim to start investing in cryptocurrency.
- Quickly switches from one platform to another to avoid detection.
Don’t Be a Victim!
- Have you been using social media apps that you don’t understand?
- Did you give/share your personal or financial information with someone you just met?
- Did you invest with an online app and can’t get your money back?
We are Here to Help!
- Do you think you are a victim of a Pig Butchering scam, financial fraud or investment fraud?
- Act quick, get help and stop any wiring/transferring of money or cryptocurrencies.
- Make detailed notes and keep all documentation relating to the transaction.
- Call your local police, law enforcement office, or the Securities Division to file a report.
References: