By Randy Hutchinson
President of the BBB
Reprinted from The Daily Memphian
It’s a terrible term, but it aptly describes a heavily scripted and contact-intensive investment scam – “pig butchering” – that the FBI warns is growing. The Department of Justice recently seized seven domain names used to swindle victims out of more than $10 million in the scam from May to August 2022.
The term alludes to the practice of fattening up a hog before slaughter. The scam originated in Southeast Asia and spread worldwide during the pandemic. The crooks usually contact the victim on dating or social media apps or even through a seemingly mistaken contact, persuading them to invest in a phony cryptocurrency opportunity. However, the method of contact, nature of the scam, and investment vehicle could differ.
After establishing contact, the crook slowly builds a relationship with the victim before turning the conversation to the crook’s success investing in cryptocurrency, including sharing screenshots of brokerage account statements with big balances. There’s no hard sell or outright request for money. Rather, the victim gradually becomes persuaded that it’s a great investment opportunity and asks for the crook’s assistance in opening an account.
The initial investment may be small, but after getting statements showing impressive returns and even being allowed to withdraw small amounts, the victim becomes more confident and invests larger sums. After the crooks determine the well has run dry, they and the brokerage website disappear. A ProPublica story on pig butchering cites the case of a Canadian man who lost $400,000, some borrowed from friends. A[RH1] California man invested the money he had on hand, tapped his retirement savings, and then borrowed money – ultimately losing over a million dollars.
The Michigan Attorney General says to watch for these red flags of a pig butchering scam (the BBB offers many of the same tips for avoiding other scams):
- Strangers sending seemingly innocuous text messages out of the blue.
- Strangers who quickly try to move the conversation to WhatsApp or another social media site.
- People who avoid video-calling with multiple excuses or flatly refuse to initiate any video-calling.
- People chit-chatting about their insider investment knowledge.
- The URL of the investment platform doesn’t match the official website of a popular cryptocurrency market or exchange but may be very similar.
- The investment app generates warnings of being “untrusted” when launched, or the computer’s antivirus software marks it as potentially dangerous.
- The investment opportunity sounds too good to be true.
Don’t send money to or invest with someone you’ve only met online. Don’t share personal, banking, or any other sensitive information with anyone online or on a website that you cannot verify is authentic.
If an online investment or trading site promotes unbelievable profits, it’s likely a scam. Be cautious of individuals who claim to have exclusive investment opportunities and urge you to act fast.