These scams, involve cryptocurrency "investments" have become a global problem, with several billions of dollars in reported losses worldwide.

https://time.com/6836703/pig-butchering-scam-victim-loss-money-study-crypto/

Key Takeaways

Pig butchering scams use fake online personas to trick victims into fraudulent investments.

Scammers gain trust, manipulate emotions, and exploit financial vulnerabilities to steal money.

Real-life examples show the devastating financial and emotional impact on victims.

Spotting signs like unsolicited messages and verifying information can help avoid scams.

If scammed, you should immediately report the crime to your bank and law enforcement.

How Pig Butchering Scams Work

Pig butchering scams are sophisticated and often follow a well-orchestrated process to deceive victims and steal their money. While there are some variations, these scams typically follow a similar pattern:

Creating a fake persona: Scammers create phony online identities, often posing as successful investors or attractive singles on dating apps and social media. These fake identities are carefully crafted to appeal to potential victims’ interests and vulnerabilities and will use stolen or artificial intelligence (AI)-generated photos and fabricated backstories to make their personas seem credible and trustworthy.

Initiating contact: Scammers will contact potential victims via dating apps, social media, or even random phone calls and texts. They may use scripts and pre-written messages to initiate conversations and gauge the victim’s receptiveness. They will often cast a wide net—contacting numerous potential victims in hopes of finding those most likely to fall for their tactics.

Building trust: Scammers spend weeks or months building a relationship with the victim, often feigning romantic interest. They engage in frequent, friendly communication, showing interest in the victim’s life and sharing personal stories to create a false sense of intimacy. They do not initially bring up anything about money or investments. They may use “mirroring” techniques to match the victim’s language, interests, and beliefs to create a sense of connection and familiarity. Scammers sometimes may even send small gifts or tokens of affection to gain the victim’s trust and emotional investment.

Introducing investments: Once trust is established, the scammer steers the conversation toward investments, often involving cryptocurrency or alternative assets like foreign exchange. This turn is usually framed as an opportunity to build a future together or achieve financial freedom. Scammers present themselves as experienced investors who want to help the victim get started and succeed. They will share fabricated success stories or claim to have inside knowledge of lucrative investment opportunities.

Prompting deposits: The scammer convinces the victim to download a supposed investment app or visit a fraudulent investment platform. They walk the victim through the process of creating an account and making an initial deposit, which is typically a relatively small amount to lower the victim’s guard. Scammers may even let the victim withdraw this initial deposit to further build trust and make the investment seem legitimate.

Manipulating further investment: Once the victim has made an initial deposit, the scammer uses manipulated data and fake reports to show huge returns on the investment. They encourage the victim to invest even more money to capitalize on this supposed success, often using time-sensitive offers or claiming that a big opportunity is about to pass. Scammers may also introduce a sense of exclusivity, claiming that the victim is part of a select group with access to these special investments. As the victim invests more money, the scammer continues to show false profit reports and uses emotional manipulation to stay in control, continuing to profess love, promising a shared future, or even using threats and intimidation.

Vanishing act: Eventually, when the scammer has extracted as much money as possible from the victim, they abruptly cut off all communication and disappear. The fraudulent investment website or app is taken offline, and the victim is left with no way to access their supposed investment or contact the scammer. In some cases, scammers may even use the information gained during the scam to commit identity theft or target the victim’s friends and family.

Real-Life Examples and Impact

Real-life examples of pig butchering scams are growing in prevalence and underscore the devastating financial and emotional impact that these fraudulent schemes can have on victims from all walks of life. The amount of money that victims lose can range from the thousands to the millions, and reports vary in terms of average losses.

A 2022 study of 550 victims by the anti-scam organization GASO found that the average loss for American victims was over $210,000.

Their study also found that 77% drained their bank accounts, and 43% borrowed additional money from friends and family. While those losses are large, another study from TRM suggests the average loss could be much higher.

Check out this podcast that explains you all the phases of the scam and how to recognize them to protect yourself: