“Pig Butchering” Investment Scams

Like a farmer dedicates great time and resources to raising livestock before they are ready to be processed and sold to consumers as food, a scammer can dedicate weeks or even months building trust with a target before convincing them to invest in a fraudulent scheme. These “pig butchering” scams require so much time, patience, and dedication from the scammer that many targets do not even consider the possibility they are being scammed. Pig butchering, referred to by the FBI as “confidence-

enabled investment fraud,” is a type of investment scam. The scam is called “pig butchering” because the scammers “fatten up” their victims by gradually convincing them to contribute more and more to their fraudulent investments, before “slaughtering” them by conning them out of money. According to the FTC, in 2023 investment scams:

· Accounted for just 4% of all fraud reports, but…

· Accounted for over 30% of total losses to fraud.

· Had an average loss of $7,000 (compared to the overall average of $599 for all frauds).

What does this process look like? Scammers take a personal approach and pretend to be a new friend or romantic interest. Others act as financial or investment “coaches” and advise their targets on where and how to maximize their investment returns. But these “pig butcher” scammers also try to maximize their own returns by stringing their target along for as long as possible. The scammer may show them fake profits, encourage them to invest more, and even allow them to withdraw small amounts early in the scam to continue building trust. Even if the target catches onto the scheme and tries to fully withdraw their investment, the scammer may attempt one last fraud by charging a fake “withdrawal fee” or taxes.

Investment scams can take months to unfold, and investment scammers rarely meet their targets in real life. If an investment opportunity is presented to you by someone you have never met in person, be extremely cautious. By some estimates, more than 1 in 10 Americans who have used a dating app since 2018 have been targeted by “pig butchering.” Be cautious if someone you met online:

· Asks you to invest – even if they pitch it as you two investing “together.” In reality, only you will be putting your money at risk.

· Tells you they know how to make big money through cryptocurrency – even if they provide evidence (which could be faked).

· Refuses to call you or meet in person, or is only able to call if scheduled in advance – they could be using new technology to disguise their voice or appearance.

Other red flags include:

· You get a “wrong number” text, and the messenger tries to establish a relationship with you.

· “Love bombing” (AKA: showing excessive affection) on a dating site or app (especially followed by an investment or crypto pitch).

· You’re told to download a “special,” “new,” or “independent” crypto trading app.

· An investment app or site offers minimal investment amounts with guaranteed high returns, or provides you small returns soon after your first investment to encourage you to invest more.

If you become suspicious of a scam, it is never too late to end contact and report the fraud.