Criminals, like legitimate businesses, target different market niches.  Consider the difference between a luxury car dealership’s showroom, with its jewel-like vehicles and perfect lighting, and that used car lot with the lowest prices and the biggest signs (“WE FINANCE EVERYONE!!! GOOD/BAD/NO CREDIT!!!”).  They’re in the same business, but with a vastly different clientele.  

Scammers are the same way.  Some are content to bilk Uncle Harry out of a couple of hundred dollars, but others target well-to-do victims and invest significant time in building relationships with them on the way to a Really Big Score.  One of these big-ticket Scams has become known as “pig butchering,” and despite the inelegant name, it’s a very smooth, sophisticated operation.  Here’s what you need to know about it.  

‘Pig Butchering’ is Evolutionary, not Revolutionary

Pig butchering scams aren’t a whole new thing, they’re a mashup and refinement of other scams that have been around for a while.  They combine evergreen elements from the “scammers’ greatest hits” – catfishing, investment scams, romance scams – but it’s the way the whole scam is conducted that sets it apart.   

Ordinary romance scams are often carried out by a single criminal who does all of the work.  Pig butchering scams, on the other hand, are big business and are managed as such.  They draw on a full team of illicit operatives: some who create a persona with a fully fleshed-out back story, others who handle the necessary coding, still others who manage the group’s financial machinations, and finally one photogenic person to play the role on-camera.  

Scammers are, in their narrow way, experts in psychology.  Ordinary people are often out of their depth when dealing with one skilled con artist, and scams are even more dangerous when they can draw on such a deep pool of resources.  

How a Pig Butchering Scam Typically Works

In the days when most of the country were rural dwellers, families typically kept a pig.  It would forage for itself all summer in the woods and pastures, and be fattened on the family’s food waste, and then in autumn be slaughtered to provide food (and cooking fat) for the winter to come.  The term “pig butchering” (it’s a literal translation from Chinese) refers to that months-long process of feeding the pig, and the correspondingly large reward at the end.  The online scam shows a similar philosophy, targeting affluent victims and cultivating them over an extended period.  

Usually, the initial contact between scammer and potential victim comes in the form of an oh-so-casual encounter, perhaps a comment on one of your social media posts or a message that has (apparently) come to your number by mistake.  If you reply, you’ll find yourself in a long conversation with this new acquaintance, who just happens to be highly attractive.  They may also have a low-key sob story to tell (a bereavement, a bad breakup, etc.), which is psychologically useful: it creates a bond (we’ve all been through bad times, right?), and it neatly explains why this random stranger is willing to suddenly be your new BFF.  

Over a period of months, sometimes many months, the victim develops a deep emotional bond with this new online acquaintance (this is the “feeding up the hog” stage).  Along the way your new friend/potential lover will casually mention having some success at investing (usually in cryptocurrency).  After a time, once you’ve gotten used to the idea that financial acumen is part of your new acquaintance’s skill set, there will come a day when you’ll be invited to invest as well.  That’s when the metaphorical knives come out.  

Then Comes the “Investment Opportunity” 

The actual scam part of the operation is usually the same kind of investment scam (typically, but not invariably, revolving around cryptocurrency) that you’d run into on platforms like Reddit or Instagram.  The details are limited only by the scammers’ creativity, but usually it boils down to an opportunity to take advantage of an “investment opportunity” that includes some combination of above-average returns, rapid returns,  and/or a flat-out guarantee that you’ll make money.  

Typically you’ll be guided through setting up a trading account, either through a website or an app that you’ll download.  Either way, it’s either created or controlled by the scammers.  Guided by your new friend you’ll make a few initial investments, which will show rapid and impressive gains on your money.  You may even get to withdraw some of your (chimerical) profits, which gives the whole enterprise an even greater veneer of legitimacy.  

So then you’re coaxed into investing some serious money, because why not set yourself up for life with a big windfall? That, of course, is when the scammers collect their payoff.  Whatever resources you’ve used to fund your investment – your existing investments, your life’s savings, a home equity line of credit – well, you’ve lost them.  If you’re really unfortunate, and already had money in other crypto investments, they may also have drained your wallet of those previously-earned funds.

Why Crypto is Usually Involved

It’s possible that a given criminal syndicate might offer some other form of investment, perhaps involving stock markets or emerging economies and sectors (“get in on the ground floor of AI!”) but most often the “pig” will be fed a steady diet of cryptocurrency.  

Crypto has a lot of advantages for scammers.  It has a high level of visibility, thanks to loads of press over the past several years (and those Super Bowl ads certainly didn’t hurt), and everybody knows that there are fortunes being made in crypto.  The flip side is that most people don’t know a lot about it, and – unlike conventional financial vehicles – potential investors don’t have a century or more of guidance to draw on.  That combination of high visibility and low expertise means that almost anybody is a potential victim, as long as they have the money to invest.  

A final, and very important, advantage is that cryptocurrency transactions are typically irreversible.  Not only that, there are some well-established tools to help anonymize funds transfers so it’s very difficult indeed to find out where the money went.  Agencies like the FBI are getting better at tracking down stolen or fraudulently-obtained cryptocurrency, but if the criminals are based in a country that won’t prosecute scammers or extradite them to the US, that doesn’t mean a lot (and most pig butchering is carried out by Chinese organized-crime rings).  

We’re Not the Only Victims

As we’ve mentioned, a typical pig-butchering scam harnesses a team that can include scores of people.  Many spend their days in character, replying to messages from dozens of potential victims, posing as the persona behind the face you see in video chats.  They’re the crime-ring equivalent of burger-flippers; low-level, low-income employees in a dead-end job (note that many scammers won’t video-chat with you, but that’s such an obvious red flag that the biggest gangs now often use an on-camera “spokesmodel”).  

For many it’s worse than that.  Crime rings are, by nature, not the most scrupulous of employers.  Often these scams originate out of “boiler rooms” where large numbers of young people, lured by job advertisements, toil away in abusive conditions that sometimes teeter into outright slavery.  

While the gangs themselves are typically headquartered in China, the scams are often run from locations scattered around Southeast Asia in impoverished corners of Cambodia, Vietnam and several other countries.  The ideal situation is some combination of official inattention, local corruption, and people desperate enough to seize any employment opportunity, however dubious.

How to Recognize a Pig-Butchering Scam

You may think you’re safe from pig-butchering scams because “those target rich people, and I’m not rich.” Well, try this little mental exercise.  How much money could you put into a really good investment opportunity, if you stretched yourself a little? If your answer is over $70,000, it’s more than what half of Americans earn in a year (the country’s median income in 2021 was $69,717).  Realistically any answer even close to that figure means you’d be passably affluent by most worldwide standards, and if it reaches six figures then you’re a slam-dunk (whether you feel rich or not).  

So the first big question is whether in the past few months you’ve struck up a new acquaintance, who has become one of your most-frequent chat partners, but whom you’re unconnected with in real life? Okay, that happens a lot in today’s world.  But have they moved the conversation from its original setting (social media, dating app, an apparently errant text) to a private messaging platform like WhatsApp or Telegram? Have they oh-so-casually brought cryptocurrency (or investments in general) into the conversation? Do they always seem to be around, no matter when you message? 

Even if you’re thoroughly persuaded that you’re interacting with a real person, with a real life (“but I’ve seen so many pictures!”), if any of those questions struck a chord for you it’s time to dig a little deeper.  Set aside your feelings, and take a long, hard look back through your chat history.  

Looking for Discrepancies

If you’re wondering how a security professional might go about unmasking a pig-butchering scheme, you’re in luck.  One crime ring had the spectacular misfortune to target a senior researcher at security firm Sophos, and he’s written about it at length.  Obviously he has access to tools (and skills) that you don’t, but some of the steps are certainly transferable.  

In his case, the face of the scam was a young woman who claimed to be Malaysian-Canadian, and the owner of a (real) west-coast winery.  Her backstory included an outlet store in Vancouver, which even showed up in a search on Apple Maps, but turned out to be bogus when he used Google’s Street View to look at the actual location (by all means, do this if your suspected scammer claims to operate a storefront).  

Oh, and the photos that helped make the backstory sound so credible? Many of them were taken in Phnom Penh, and images of the winery clearly showed that they were taken in France.  You can use Google’s Reverse Image Search to do similar research, or any photo software to zoom in and look for tell-tale details like out-of-place phone numbers, street names or license plates.  

If the (possible) scammer claims to be a US resident, you can also use Spokeo’s Background Check, Email Lookup, Address Search or Reverse Phone Lookup to verify them.  Results that contradict the information you’ve been given (or each other) are a big red flag.  

Apply a Healthy Dose of Skepticism as Well

If any of these previous steps have raised doubt in your mind, well… good! That’s especially so if the conversation has already moved to the “investment opportunity” stage.  While cryptocurrency is new and unknown territory for most investors, a few of the old, immutable truths still apply: 

• If it sounds too good to be true, it usually is.  
• If you’re being pressured to act immediately, it’s seldom in your interest to do so.  
• Investments are either safe, or high-yield.  They absolutely cannot be both.  
• Returns are never guaranteed, except in the case of very low-yield, low-risk vehicles like CDs and savings accounts (and even then, usually only for a specified period).  

If in doubt, make note of the URL of the site where you’re expected to make your investment (or download the corresponding app).  You can look those up on a central Web registry, to see when it was founded and who owns it.  If it has only been set up in the preceding weeks (or days!), and if the ownership data is obscured or doesn’t coincide with what you’ve been led to expect, there’s a strong likelihood you’re being set up.  

Reporting a Suspected Pig Butchering Scheme

If you believe you’re in contact with a pig-butchering crime ring, you’ll want to reach out to the authorities immediately.  That may include your local law enforcement agency, but you should also report the incident to the FBI’s Internet Crime Complaint Center (IC3), the Financial Industry Regulatory Authority (FINRA), and the FTC’s Report Fraud website.  Save and take screenshots of all of your interactions with the suspected scammer, to the extent that you can, because it’ll help the investigation.  

You may also want to report the details to public-awareness platforms like the AARP’s Scams Hotline or the BBB’s Scam Tracker, which potentially can help the next person avoid getting scammed in similar fashion.  Going on the local news, or putting word out on your own social media platforms, can also bring visibility to the problem (though it can be a bit embarrassing for you, personally).  

If you’ve already lost money, there’s unfortunately little you can do about it.  Banks will usually cover your losses due to a hack or data breach, but not if you’ve voluntarily sent money to a scammer.  You may, at best, be able to cancel any pending payments or transfers (should there be any).  Law enforcement may eventually recover some of the money, but that’s a long shot.  So is action against the scammers, but it does actually happen occasionally.  

As Always, Forewarned is Forearmed

The biggest single thing you can do to protect yourself against pig butchering, as with any scam, is simply to educate yourself (so congratulations for reading this far!).  If you know how the scammers work, you’ll be “inoculated” – to some extent, at least – against falling for one of these scams.  

After that, it all comes down to vigilance.  Scammers are always out there, and they only need you to be vulnerable once.  So the next time you get a text from an apparent wrong number, just ignore it.  Don’t engage, even to the extent of responding that it’s a wrong number.  Whether it’s legitimate, or a scammer trying to catch your attention, they’ll eventually get the hint and stop messaging.  

Sources

• US Federal Trade Commission: Investment Scams
• Financial Industry Regulatory Authority (FINRA): ‘Pig Butchering’ Scams: What They Are and How to Avoid Them
• ProPublica: What’s a Pig Butchering Scam? Here’s How to Avoid Falling Victim to One
• Vice News: From Industrial-Scale Scam Centers, Trafficking Victims are Being Forced to Steal Billions 
• US Census Bureau: Income In the Past 12 Months (in 2021 Inflation-Adjusted Dollars)
• Sophos: Sour Grapes: Stomping On a Cambodia-Based “Pig Butchering” Scam
• Google Support: Search With an Image on Google
• ICANN: Registration Data Lookup Tool
• US Federal Bureau of Investigation: Internet Crime Complaint Center (IC3) 
• Financial Industry Regulatory Authority (FINRA): File a Tip
• US Federal Trade Commission: Report to Help Fight Fraud!
• AARP: Scams & FraudProPublica: Authorities Raid Alleged Cyberscam Compounds in Cambodia