What are Pig-Butchering Scams and How Do They Work?

a man upset with himself because he got scammed online

Welcome to the shady world of pig-butchering—a term that has nothing to do with farming but everything to do with a global surge in deception. In the world of scams, pig-butchering is a type of behavioral and investment fraud that has rapidly gained traction since the pandemic. While quantifying the money stolen in these scams is challenging due to limited reporting, a recent study recently revealed at least $75 billion in cryptocurrency alone was stolen between 2020 and 2024 due to pig-butchering. The burning question remains: what exactly is pig-butchering and how does it work? Keep reading to discover all the key details about this scam.

What is a Pig-Butchering Scam?

Named after the farming practice of fattening livestock before slaughter, pig-butchering scams paint victims as pigs, with scammers playing the role of butchers. This term underscores the gradual process of luring victims into what seems like an authentic investment before disappearing. Typically initiated by a deceptive “wrong number” text, victims are drawn into fake crypto investments. Once funds are sent, the truth emerges—the investments were fake and the scammers have vanished, leaving victims in financial ruin.

How Does a Pig-Butchering Scam Work?

  1. First Contact: The scammer contacts their target through an unsolicited message or phone call. They might reach out through text messages, social media platforms, or messaging apps like WhatsApp and WeChat. This initial contact is seemingly random, and the scammer tries to establish a connection with the victim. In addition, scammers frequently research their victims through social media to learn information about them, improving their ability to bait their victims.
  2. Building Trust: Across days, weeks, or even months, the fraudster engages in non-investment-related conversations. The goal here is to break down the target’s walls and exploit their vulnerabilities. This might include sharing photos, discussing personal activities, and even adopting various personas, such as claiming to be a widow, single parent, or a member of the U.S. military living overseas. The main objective is to foster trust and establish a connection with the victim.
  3. Guiding Towards Investments: In due course, the conversation subtly transitions to investment-related topics. The scammer might ask if the victim has an investment or crypto account, often claiming to have a connection of their own with a reputable financial institution.
  4. Creating Illusion: The scammer introduces the illusion of wealth by sharing screenshots of their own alleged brokerage account, highlighting major investment gains from their stock picks. This helps the fraudster convince the victim that following their instruction will lead to profits.
  5. Verification and Directions: Interestingly, the scammers refrain from directly soliciting money from their victims, a deliberate move to avoid raising suspicion. Instead, they present an opportunity to assist their target in setting up and "controlling" their own account. The scammer also asks the victim to verify their brokerage accounts to trade in a specific security. Once verified, they provide detailed instructions on which company to invest in, the quantity to purchase, and a specific price.
  6. Simulated Success: For a bit, the victim believes they are making positive financial moves on a legitimate platform. In fact, scammers create fake brokerage websites and apps for users to log into which are designed to mimic the appearance and functionality of genuine platforms. Many of these phony sites can simulate fake results, duping victims into believing they are witnessing profits in their own investments.
  7. Disappearance: After the victim invests, the scammer disappears. They vanish with the victim’s funds, leaving the victim with worthless investments and shattered trust. Most scammers send the scam proceeds to centralized crypto exchanges so they can cash out for traditional money. This final stage underscores the severity of pig-butchering scams, as victims find themselves dealing with significant financial losses (losing hundreds of thousands or even millions of dollars). Thus, their savings, dreams for the future, and trust in others has been butchered.

How are Scammers Using Artificial Intelligence for Pig-Butchering?

Unfortunately, artificial intelligence (AI) isn't only in the hands of the good guys, and the rise of this technology has given scammers a powerful toolset. Criminals equipped with generative AI tools can easily produce realistic videos, forge fake IDs, create false identities, and generate convincing deepfakes of company executives. These capabilities pose significant risks, especially when applied to large-scale social engineering scams.

Furthermore, fraudsters can use AI to mimic a person's voice effectively within just three seconds of having recorded data. The fast expansion of AI in deceptive practices heightens its threat, demanding greater awareness and proactive measures from individuals and organizations to counter these evolving technological manipulations effectively.

Who are the Victims in Pig-Butchering Scams?

Forget the stereotype of scammers going after folks with tight budgets. Pig-butchering scams target more affluent crowds like executives and professionals with high salaries. According to the 2022 IC3 report, the usual targets of these scams belong to the age bracket of 30 to 49 age years old. Why? Fraudsters know this age group is vulnerable because its members hope to grow their wealth while maintaining their current lifestyle.

Another demographic susceptible to these scams includes people who are approaching retirement and actively looking for investment opportunities to secure their financial future. Scammers may exploit this sense of urgency and vulnerability to persuade victims into investing in their deceitful schemes.

Who are the Scammers in Pig-Butchering?

Pig-butchering scams have found a troubling stronghold in Southeast Asia, particularly fueled by scam sweatshops controlled by Chinese criminal syndicates. Here, victims of human trafficking are forced to execute pig-butchering schemes against their will.

Specifically, unsuspecting workers from various Asian regions are lured to Cambodia, Laos, and Myanmar with the promise of well-paid jobs, only to discover themselves trapped in scam sweatshops when they arrive. These victims are forced to choose between generating income for the syndicate or losing their lives. The scale of the issue is greatly concerning, and the United Nations estimates that over 200,000 people are being held captive in the scam compounds.

How Does Academy Bank Protect Clients from Scams?

Global scams like pig-butchering highlight the need for financial institutions to supply their executives, associates, and clients with education and tools to fight against fraud. At Academy Bank, we take financial security seriously. We go the extra mile with our proactive education initiatives which provide our team and clients with the knowledge necessary to effectively navigate financial fraud.

While it's important for clients to stay alert, actively monitor their accounts, be cautious with money transactions, and stay skeptical of unsolicited communications, Academy Bank steps up to enhance financial security. Our advanced software takes the lead in detecting anomalies within client accounts, showcasing our dedication to protecting your financial well-being.

Moreover, Academy Bank provides specialized products with features designed for strengthening your security. For instance, our Select Rewards Checking* accounts have the following advanced features:

  • Identity Theft Expense Reimbursement Coverage1 — Receive up to $10,000 for paying expenses, clearing your name and restoring your identity, should you fall victim to identity fraud.
  • Credit File Monitoring — Daily credit file monitoring and automated alerts of key changes to your credit report. (registration/activation required)
  • Comprehensive Identity Theft Resolution Services — Should you suffer identity theft, your very own dedicated fraud resolution specialist will help you every step of the way until your identity is restored.
  • Identity Monitoring — Surveillance over 1,000 databases for your protection. (registration/activation required)
  • Dark Web Monitoring — Supervise your personal information on the dark web and receive alerts when your personal information is exposed. (registration/activation required)
  • Online Identity Theft News Center & Valuable Phone and Web Resources — (registration/activation required)

If you fall victim to a financial scam of any kind, notify your bank immediately. Our dedicated team will guide you through additional steps to protect your finances.

Academy Bank doesn't just meet standards; we set them, offering a level of security that truly stands out in the financial landscape. Looking for more tips and tricks to spot scams? Learn how to spot phone scams, email scams, and text message scams in our previous blogs.

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