Why "Pig Butchering" and Other Scams Are on the Rise

Source: Fizkes/ Shutterstock

by Stacey Wood and Yaniv Hanoch

The British consumer protection magazine Which? recently identified some of the most convincing and successful scams of 2023, which included "pig butchering" (described below), the "missing person scam,” and the “fake app alert.” These scams insidiously take advantage of various psychological attributes and cognitive strategies, including weaknesses, blind spots, biases, and heuristics, to infiltrate defenses and successfully scam consumers.

Pig butchering is a term used to describe long-term scams that include developing relationships with victims. It combines elements of a romance scam with an investment scam. There's also a trend toward what are called “hybrid scams,” which combine different scam types, such as romance scams and investment scams, or job scams and investment scams. These scams also often involve crypto investments or have been reported to use forced trafficked labor. In the U.S., the FBI recently reported a loss of $3.3 billion last year to investment fraud.

"Pig Butchering" Scams

The “pig butchering” name comes from the strategy of “fattening up” a victim before the slaughter. The scam usually involves a standard scam approach like a text, social media message, or introduction at a job board site. Once contact is established, the scammer will slowly develop a relationship, ultimately initiating a romantic relationship, which is carried out by text, or often on some other messaging app.

At some point, the scammers will introduce an investment opportunity and use fake crypto platforms to demonstrate returns. Victims can invest and “see” strong returns online. In reality, their money is going directly to the scammer. When the victim runs out of money or tries to withdraw funds, they are blocked.

Pig butchering starts as a traditional scam, often an unsolicited message to a social media post. Consumers may have their guard up for a moment; however, these scams can unfold over months, with the scammers slowly gaining the trust of victims and both learning and exploiting their vulnerabilities. Over time, their defenses relax as the relationship grows and a sense of intimacy develops. Romance scammers often saturate their targets with affection, attention, and almost constant contact to reinforce engagement.

Once emotional needs are met and the victim depends on the scammer for emotional connection, the scammer introduces the idea of the investment. At this point, the psychology begins to look more like that of a classic Ponzi scheme, in which the victim trusts the scammer and sees returns on initial investments, resulting in a willingness to increase their investments. The scammer can then capitalize on the “excitement” of building wealth and create the fantasy of a bright future together.

The scammers may use legitimate-sounding coins and platforms to increase their authority and legitimacy. Once a victim has made a substantial transfer, they are leveraged and less likely to pull out. This phenomenon is known as sunk cost, referring to the tendency to continue investing money, time, and effort in activities that one has already invested in. Like all Ponzi schemes, though, they eventually fail, and the victim is left with not just financial devastation, but also the loss of what had become their most intimate partnership.

Because of the nature of this type of scam—long-running, intimate, losing large sums of money—victims are often ashamed and too embarrassed to discuss it with friends and family or report to the police.

A New Missing-Person Scam

The missing-person scam is new and capitalizes on an individual’s desire to be prosocial or altruistic. In the past, charity scams have been an evergreen approach in which scammers pose as charitable organizations often responding to a recent calamity.

However, the new missing-person scam is more sophisticated in that the initial plea is a (fake) missing-person post that generates likes and shares, increasing its authority, credibility, and exposure. Then, the authors edit the content to become an investment scheme that now has the veneer of legitimacy. This scam may work because the initial consumers are unaware that the content is fraudulent and there is no obvious “ask.”

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Fake Payment Scam

PayPal scams, or fake payment requests, are common scams that works by volume rather than playing a long game. These payment requests appear to come from a genuine PayPal address. I have received these scam requests and they are very difficult to discern from legitimate PayPal request emails.

These scams work through mimicry, authority, and legitimacy, wanting to encounter enough consumers to increase their chances that some will mistakenly click on the request. As with fake websites, taking the time and paying careful attention to the information is key to avoiding these scams. Scammers, however, count on us paying little to no attention to our emails or messages and thus clicking on them or providing valuable information.

Fake App Scam

Lastly, the fake app scam includes posting apps that are developed to steal consumer information on the Apple app store. These scams benefit from the legitimacy of the Apple app store, and they have the “cover” of having a legitimate function. Consumers unknowingly jeopardize their private information by downloading these apps.

Fraud is the most common crime now. It impacts individuals' financial and emotional well-being. Avoiding it is the best way to reduce it. Scammers utilize a range of psychological (and other) mechanisms to lure victims into their net. Being cautious and alert to possible signs is one of the key ways to reduce the likelihood of becoming a victim. This is much easier said than done.

However, there are actions and warning signs that individuals can take and pay attention to. Sending money should always be done cautiously and after as much due diligence as possible. It's recommended to discuss possible investment opportunities with friends, family members, or professionals before sending money. It is also important to be diligent or careful when receiving any email regarding money, credit card, PayPal, etc.

As the saying goes, the devil is in the details. Or with many scam cases, in the missing details. Unfortunately, with the proliferation of scams, we cannot be too careful or too diligent.

A version of this post also appeared on the Conversation, UK.