A new variant of romance and investment scams ungraciously named 'pig butchering' is on the rise, having already stolen hundreds of millions of dollars from unsuspecting victims.
Although pig butchering scams originated in China, this growing scam vector has gradually evolved from mostly targeting Chinese-speaking communities to landing victims from across the globe during the COVID-19 pandemic.
Now, the lucrative scam method has been used to extort large sums of money from Australians, and has been linked to multiple criminal groups with yields in the hundreds of millions – but how does it work?
The initial stages
Pig butchering scams employ the familiar tactic of falsely promising romantic relationships or investment opportunities – typically via dating apps and messaging platforms – before gradually "socially engineering" the victim out of large sums of money under the false promise of profitable investments.
Where they most notably differ from the average romance or finance scam is in their preference for long-term schemes rather than a quick, one-time payout.
A pig butchering scam will often start like this: a fraudster reaches out to the target victim via social media or a messaging app such as Whatsapp or Messenger.
This initial message is usually sent under a fake name coupled with an alluring profile picture, and often gives a quirky explanation for why they've made contact (for example: they've found your name in their contacts list or have mistaken your number for someone else's).
Once the victim replies to this introductory message, the fraudster will then initiate friendly conversation designed to build rapport and will continue to establish trust by sending innocuous follow-up messages over the course of weeks or even months.
During this initial trust-building phase, the criminal will rarely mention anything financial or outwardly suspicious, opting instead to lure the victim into a "genuine" friendship or romance.
Once the criminal feels the victim is sufficiently fooled into a trusting relationship, they'll move into the next phase of the scam.
Fattening up the victim
From this point, the scammer is looking to accomplish two things: the first is to gauge whether the victim has enough money to "invest" into the scam, and the second is fooling them into thinking they will make a profit.
These goals are typically achieved by introducing the victim to fraudulent trading or cryptocurrency opportunities, offering quick returns on time-sensitive investments to a new or obscure coin.
The scammer will often nudge the victim to trade on a specific platform, the kicker being the platform is secretly controlled by a criminal pig butchering group.
At this stage, the victim may actually see some slight "returns" on their investments – however, these are often staged and designed to further gain the victim's trust.
Once the victim has started trading, the criminal will gradually move in for the final stage of the pig butchering scheme.
To the slaughter
Over time, the victim invests increasingly larger amounts into the fraudulent platform, cryptocurrency or stock, unknowingly setting up for enormous losses.
At a certain turning point the victim will find their money has been utterly swindled – whether by way of a plummeting "investment" or simply being locked out of the investment platform holding their money.
The scammer will typically "ghost" at this point, leaving the victim with nothing but an empty bank account and radio silence.
This malicious process of maximising financial yields from a target victim is where the scam originally found its name: "pig butchering", or sha zhu pan (杀猪盘) is aptly named after the practice of fattening a pig before the slaughter.
In one such example of pig butchering, a Sydney woman was goaded by a scammer disguised as a romantic interest on Tinder into investing gradual sums of money into an apparent cryptocurrency.
Over time, she put almost $46,000 into the fraudulent investment, before she was abruptly blocked from withdrawing her expected profits.
After realising she was involved in a pig butchering scam, she was left with no avenue to reclaim her lost finances.
The US Federal Bureau of Investigation (FBI) and the Global Anti-Scam Organisation have issued warnings about the scam, and recently the Australian Federal Police arrested four Sydney-based individuals allegedly involved a scam syndicate said to have stolen $145 million (US$100 million) worldwide.
“It is essential people exercise the utmost caution if cold-approached online or on the phone by people trying to sell financial or investment services,” said AFP Cybercrime Operations Eastern Command Detective Sergeant Salam Zreika.
“Criminals are ruthless and will stop at nothing to take your money,”
According to Zreika, more victims of pig butchering and similar scams are appearing daily, and in some instances, losing their life savings.
“Refrain from investing in foreign exchange, cryptocurrency or speculative investments with people you’ve only ever encountered in the online environment.
“If you are unsure, get a second opinion from a professional, in-person,” said Zreika.