Beware of a new form of scam which is targeting banks and consumers known as ‘Pig Butchering.’ This scam is named in reference to the practice of fattening a pig before slaughter. It is a type of fake confidence building measures and investment fraud in which the victim is gradually lured into making increasing monetary contributions, generally in the form of investments, to a make belief high return online trading app/ or investment portals, before the scammer disappears with the contributed monies.
Key Takeaways:
- Pig butchering scams use fake online personas to trick victims into fraudulent investments.
- Will provide you the real-life social trust.
- The Investment Options will appear to be similar to the ones in the market, and payment or investment will be through legitimate looking websites.
- A thorough KYC and genuine looking methodology will be adopted.
- Scammers gain trust, manipulate emotions, and exploit financial vulnerabilities to steal money.
- The return on the investment made will also be available in a legitimate bank account, and may also be dramatized as profitable.
- Any such victim, of such a scam, should immediately report the crime to the bank, regulators and law enforcement.
The Scam Unfolded:
Raja, (Name Changed), a software engineer at Bangalore, is employed at an MNC. Raja, had met one Sneha, (Name Changed), at a workshop on horoscopy at a hotel about nine years ago at Chennai. In the month of Dec 2023, Sneha, contacts Raja, from Chennai over the tele, and chit-chat on the conduct of the course and also they enquire and exchange pleasantry and convey all about each other in the conversation. This exchange further ensued as time went by. The mutual bond, and Raja, enjoyed the conversation(s); only to connect over social media, in the ensuing days. Soon the exchange and pleasantry, had topics to include food and mundane family information. Raja, confided his financial investments and portfolio as a matter of trust and confidence building. In Jan 2024, Raja, on the basis of confidence and trust, and on the advice of Sneha, moved an investment of Rs 1 lakh, to an online trading portal, after due process. Raja, then routinely used to log-in to the App and watch his investment. In Mar 2024, the investment showed a 40% increase. He further in his casual conversation with Sneha, informed her that the investments that she had guided, is fetching her continued profit, and Raja conveyed his appreciation and thanks for the intelligent guideship. Raja, in Apr 2024, ring up Sneha, and informed her, that there now exists a need to withdraw the investment for some medical needs of his aging father. Sneha, then advises on the contrary and then advises to infuse another 1 Lakh and then initiate a withdrawal in the month of Jul 2024, so as to facilitate a larger return then. Raja, then by vitue of the trust and confidence entrusted on Sneha, decides to meet the impromptu expenditure from his other savings and also is assisted to Sneha, to take a Personal Loan from the Linked Bank and augment the already made investment. Further, Raja, brings up his investment to Rs 1,96,000/-. In the month of Jun 2024, Raja, decides to break the investment for some purchases. Raja, logs-in and fins that he has a figure of Rs.3,20,000/- available for withdrawal on the Trading App. This then motivates Raja to ring up Sneha, and inform her. The call does not go through, and hence he performs the procedure on the App for withdrawal. This act is in futility and he finds that no such withdrawal is working and he finds that the App is a Fake App, His effort to track Sneha, turns out with no results. This is when Raja realizes that he has been duped. Raja had fallen victim to a scam known as “pig butchering.”
What is Pig Butchering?
“Pig Butchering,” a term that refers to the practice of fattening a hog before slaughter. Also known as a “sha zhu pan” scam, is a type of online investment fraud that involves scammers creating fake online personas to lure victims into fraudulent investment schemes. The term “pig butchering” comes from the scammers’ practice of “fattening up” their victims by building trust over time before “slaughtering” them and stealing their money.
“Pig Butchering” Scam is different from all other types of online fraud, due to a few distinctive characteristics. Human Psychology is the main tools used to trick the customer, and it’s usually highly sophisticated, personalized and deliberate. An investing concept or even a romantic relationship could initiate it. The victim of these frauds frequently gets tricked into believing that the purported investment is legitimate and profitable, and scammers invest in making the apps and loading it on Play Store and App Store. The money that is reflected on the apps will modulated and manipulated to show progressive increase and profitability.
Pig butchering involves extensive grooming and relationship building. Scammers often spend weeks or months cultivating a relationship with the victim. The Scammer does a thorough study and profile the person on all aspect, and then befriending the victim using an acquaintance’s name or lure the victim with promises. The Scammer will also do acts that are ‘Make Belief’ and in many instances may even return the initial investment with profit, to gain trust.
How This Type of Scam Targets Consumers:
- The perpetrators might contact randomly by way of text messages, dating apps, social media platforms, and then later switch to WhatsApp chat or other Chat/Calling Apps.
- They will try to develop meaningful relationships, gain trust, and will lure the victim with high-yield investment opportunities in virtual assets, such as bitcoin, etc.
- They will ensure that a bank account is opened on online investment websites and make deposit through digital means, some to shell companies, or direct transfers on legitimate Virtual Asset Service Providers (VASPs) or cryptocurrency exchanges, and will promise legitimacy.
- The scammer will lure the victim into increased investment for larger returns. They also convince the victim of the legitimacy and also adverse consequences on premature withdrawal.
- When attempt is made to withdraw money, websites may demand payment of additional fees to do so; or they make lead to a virtual lock-out of the account.
- In this the scammer is sure to disappear, once the scan is nearing its detection.
Avoid Becoming a Victim
- Never trust a caller, even if the caller is able to identify her/himself as a known acquaintance.
- Never fall for any friend request, with out verification on the social-media.
- Schemes that promise, returns, more than the market trend; should be viewed with suspicion.
- Be aware, be skeptical, think twice, it’s too good to be true, don’t feel embarrassed if you get caught in one of these schemes. Contact the bank, regulators and law enforcement; on realization of the fraud.