What is pig butchering scam? How to avoid getting ensnared?
Scammers win over their victims by acting like a friend or a romantic partner, trick victims into giving them money for fake investments and run away with it
In the backdrop of a rising spate of online scams, Zerodha founder Nithin Kamath on Monday dropped a warning on social media platform X about ‘pig butchering scam’ through which fraudsters ensnare unsuspecting victims into investing in fake schemes by winning their trust and decamp with their money.
Here's what the scam is all about and how to stay safe:
What is pig butchering scam?
Pig butchering is a scam in which scammers win over their victims by acting like a friend or a romantic partner, trick victims into giving them money for fake investments or jobs and run away with it.
The scam which originated in China is an umbrella term for fake job offers scams, fake crypto investments and dubious high investment schemes.
Why the name pig butchering?
The name pig butchering is used as scammers first win the trust of their victims before scamming (or ‘butchering’) them. This is akin to the process of fattening the pig before butchering it.
“They use the pretense of love and friendship to gain the trust of users and then induce them to send money for jobs and high-return investments and steal the money. These scams are global, and their scope is staggering,” Kamath said in his post.
What is the modus operandi?
For the scammer, it takes a lot of communication and relation building over a period of time to gain the trust of the victim and bond with him or her.
Scammers start by cold contacting prospective victims through text messages or through social media or dating platforms. Most of the times they will send a message like “Hi” and if the recipient responds in a positive way, try to strike a conversation.
Their next step would be to bond with the victim either as a friend or a romantic partner. After this, they would slowly drop hints about a new job offer or a cryptocurrency investment which is giving them quick gains.
According to the Federal Bureau of Investigation, in most cases, the fraudsters paint themselves as highly-successful traders in cryptocurrency and entice victims to make purported investments in cryptocurrency by promising them fictitious returns.
Once the victim is game, the scammer would then direct them to an app or a website that may seem trustworthy but is really malicious.
The app or the website would be built in such a way that the victims would be able to see real-time market data to show the potential of the investment and can even see their ‘balance’ grow in their ‘investment accounts’. A WIRED article on pig butchering says that building such convincing financial platforms that look genuine is one of the hallmarks of the scam.
Once the victim has deposited all the money, the scammer shuts down the account and flees with the money.
What’s the damage?
Kamath says the scale of pig butchering scams in India runs into tens of thousands of crores. Victims are left not just financially damaged, but psychologically too as they get emotionally attached to the scammer and feel betrayed once reality kicks in.
Kamath says the victims of these scams could also be victims of fake job offers.
“What makes these scams even more cruel is that the person scamming could also be a victim of another type of scam. Many fall into the trap of international job offers from scammy companies. Once abroad, they are held captive and forced to scam Indians by building trust using social media platforms, typically using fake profiles of the opposite sex,” he said.
According to WIRED, in many countries like China, crime syndicates have developed scripts and playbooks to ‘guide’ rookie scammers and forced labourers (victims of human trafficking) to do the scam.
How to protect yourself against pig butchering?
Kamath suggests ways to stay safe from these scams. Here’s what he says:
Never reply to unknown messages on WhatsApp, social media platforms, and dating apps.
If someone asks you to download some new apps or open links, that’s a red flag.
These scams rely on exploiting your emotions like hopes, fears, dreams and greed. Never react in a hurry.
Don’t panic. Most people fall for these scams because they react in a hurry.
When in doubt, go to the nearest police station or talk to a lawyer.
If someone promises something like a job or a high returns or asks you for money, it’s a red flag.
Never ever share personally identifiable information like your Aadhaar, Passport, or your financial information like bank details, investment details etc.
If it sounds too good to be true, it probably is.