Pig butchering: when human trafficking and online scams collide

At this point, we’ve probably all been targets of online scams. Most of the time, they tend to fall into one of a few categories – you’re usually being tricked into clicking on a malicious link or pressured into taking a particular action with the usual social engineering tactics, like when a fraudster claims to have compromising footage of you or, after learning some of your personal details, pretends they’re from your bank.

But something else – and far more disturbing than anything else seen before in this sphere – has cropped up recently. Known as pig butchering scams, this new development represents a massive, and deeply worrying, divergence from the aforementioned tactics. By employing sophisticated tactics and taking a long-term approach, criminal organisations are tricking vulnerable people into parting with vast sums of money – and ruining people’s lives in the process.

How do pig butchering scams work?

What makes this scam different from anything we’ve seen before is the fact that criminal organisations are often using human trafficking victims to do the scamming itself. These people are forced to trick other individuals into putting their money into fake crypto investments, before disappearing with the cash.

It all starts with a text or direct message that seems to be for the wrong person. When you reply and say ‘sorry wrong person’, they start up a friendly chat. They’ll then get to know you, slowly sussing out your income and background, before slipping into the conversation mentions of their own lavish lifestyle. They might even make it seem like they’re doing you, the target, a massive favour by giving you access to an app or website, claiming that it’s made them rich – and why shouldn’t they try it too?

The target will be given access to the fake crypto website, which tend to look legitimate to a non-expert. They even sometimes set up feeds of crypto prices to make it seem extra believable or add the target to an investment-focused group chat, which is filled with fake profiles. Once the so-called investment is made, the scammers will make it seem like their money is growing to entice them to add even more funds. This is where the name comes from. They’re fattening up the pig.

And then the butchering is about taking everything from the snout to the tail. Nothing is left. They want it all. And when it is all gone, they push for the victims to take loans, to pull in friends and relatives.

This is not a smash and grab crime. When finally, every penny is extracted, the scammers simply disappear.

Collateral damage

Part of what makes this so uniquely terrible and disturbing is that the scammers themselves often are human trafficking victims, who were often recruited with promises of jobs but now have quotas to hit. And what happens if they don’t hit those? They could end up being tortured, sold to another gang, used for organ harvesting or other kinds of trafficking. There’s no escape for them, and no option but to try their hardest.

Pig butchering scams originated in China, but after the country’s crackdown on crypto scams, the criminals moved base to more economically disadvantaged countries where they could operate more under the radar. These places include countries like Laos, Cambodia and Myanmar, which face their own share of issues. Sometimes the authorities already know where these compounds are, but they simply don’t have the resources, or the local authorities are allegedly being paid off.

And because this scam employs crypto, there is limited recourse for the victims to recover their money and fewer opportunities for authorities to pinpoint and track the criminals.

It’s already a substantial problem, and it’s growing at a considerable rate. The FBI’s Internet Crime Complaint Center received more than 4,300 submissions related to pig butchering scams in 2021. These alone added up to losses of more than US$429 million. And, in 2022, in the United States alone victims reported losses of US$2.6 billion. However, the true scale of pig butchering losses is unknown because victims are often too embarrassed to report these crimes to authorities.

The toll of these scams is devastating – ruined and lost lives among both the scammers and their victims, while criminals are getting away with all the stolen money.

Can we find a way forward?

When most people think of scams, they tend to think of it as just the criminal and the victim – and while that is generally not the case anyway, the odds are especially weighted against the target in this instance. There is a whole team of people working and conspiring against an individual. With ACAMS calling these tactics “methodical, targeted, and patient”, it’s no surprise many are falling victim.

To tackle this situation, we need to focus on education, first and foremost. Anyone can get scammed, it’s only the matter of the right script used by the scammer. Bringing widespread awareness to the usual tactics is the first step – not only so that people can spot when it is happening to themselves, but also so that they can also keep an eye on their friends and family.

As this scam is built over time and the initial payments appear to be successful investments, often even allowing the victim to harvest some of their initial gains to build confidence and trust, banks and payments providers have a front row seat as the fraud begins. Looking for specific red flags in the data and working with the right technology, it is possible to intervene before all is lost.

A perfect storm has led to the formation of pig butchering scams – a confluence of crypto, advanced technology and vulnerable human trafficking victims falling through the cracks. While it seems like it could be insurmountable, there are still ways to fight back.

While crypto makes it difficult to track, this crime is not entirely devoid of red flags in the banking data. People start to act differently, and that can be tracked.

Learn how to detect pig butchering scams

Our pig butchering investigation guide provides banks and AML vendors with the information needed to better detect these crimes. Know what to look for and how to find it by downloading yours today.