'Pig Butchering' Scam Discovered on the Isle of Man

‘Pig butchering’ is a sophisticated type of investment fraud where the scammer seeks to build a personal online relationship with their victim and gain their trust before convincing them to make a specific investment and then promptly disappear with the money.

The perpetrators of these scams talk about the process as akin to ‘fattening the pig’. They refer to their victims as ‘pigs’, and to themselves as ‘butchers’, hence the expression ‘pig butchering’.

Pig butchering scams can take many forms but generally follow this pattern:

• ‘Pig hunting’

The criminals begin by what they term ‘pig hunting’. They scour online platforms such as social media and dating sites/apps for potential victims, sending unsolicited messages to as many people as possible until someone responds. Using fake profiles, the criminals seek to lure their victims into an online romantic relationship or friendship.

• ‘Pig raising’

The key to pig butchering is gaining a potential victim’s trust. Scammers can spend many weeks or even months getting to know their victims and lulling them into a false sense of security. The scammers refer to this element of the fraud as ‘pig raising’.

In their conversations with their victims, the criminals will casually mention how investment-savvy they are. They often talk about a contact who is an expert in specific investment types and who instructs them on investment opportunities. There is often a romance element to pig butchering, and the criminal may talk to their victim about how luxurious a lifestyle they will enjoy together when their investments come to fruition.

• The scammer makes their proposal

Once the criminal is confident that they have their victim’s complete trust, they will make their investment proposal. Often, they will offer to help the victim invest in cryptocurrency or foreign assets. If the victim agrees, the scammer talks them through downloading a fraudulent app or visiting a fraudulent web platform and ‘helps’ them make an initial deposit.

• The victim makes further investments

Once the victim has made their initial deposit, the fraudulent app or website displays fake reports showing the deposit increasing in value, claiming it is real-time data and suggesting that the investment is delivering the promised returns. In some cases, the victim may even be able to make a withdrawal just to reinforce the apparent legitimacy of the investment. The reassurance of seeing their investment increase and the ease with which they were able to withdraw funds often encourages the victim to invest even larger amounts of money in the scam.

• The scammer disappears – ‘pig killing’

The final element of the scam is termed ‘pig killing’ by the scammers. When they believe they have conned all of the money that they are likely to get out of their victim, the scammer simply disappears. The fraudulent app or website through which they took the victim’s money is promptly taken offline, and the victim is left with no access to their money and no way of locating the scammer.

The pig butchering scam on the Isle of Man involved teams of scammers colluding to entice potential victims into group chats hosted by QQ, a Chinese instant messaging service similar to WhatsApp. In the group chat, one scammer would assume the role of ‘teacher’, with the others playing the role of ‘investors’.

Between them, the scammers would praise the skills and successes of the ‘teacher’, who would then advise the victim to make specific investments on platforms controlled by the criminals. The scammers went on to take the money and disappeared. The Chinese Courts estimated that at least 12 victims lost in excess of £4 million through the scam.

The scammers worked for a company called Manx Internet Commerce, or MIC. According to Chinese Court papers obtained by the BBC, six individuals who carried out MIC’s fraudulent activities on the Isle of Man were prosecuted and found guilty.

Pig butchering scams are a sophisticated type of investment fraud. The perpetrators are usually highly organised criminal gangs whose members work from carefully prepared scripts and spend time nurturing a false sense of intimacy and trust with their victims.

Follow these steps to avoid falling victim to a pig butchering scam:

1. Be wary of unsolicited contact

You should always be wary of messages received from people you don’t know via social media or other online platforms such as dating apps. Even if the sender claims to know you or to have a mutual friend, keep your wits about you; they may be scammers looking to strike up a conversation and gain your trust.

2. Be vigilant

If you do engage with someone online, be sure to remain vigilant when speaking with them. Look out for contradictory or vague information and be mindful of anyone attempting to isolate you from your friends and family or pressurise you into investing quickly, for example by claiming it’s a ‘one-time-only’ offer. Also be wary of any requests for personal identification information, such as a passport, drivers licence etc, even if they offer to share theirs – this is a common tactic to try and build trust and extract your valuable details.

3. Be sceptical

If something seems too good to be true, then it generally is! Guaranteed returns for little or no risk that require minimal effort are always red flags. Before you invest any money, it’s essential to thoroughly research the investment opportunity, speak with a financial adviser where necessary, and confirm that the app or website you are being directed to is genuine.

4. Be firm

If you are uncomfortable with making the investment requested or need time to investigate it thoroughly, just say no. Anyone who becomes aggressive and defensive when challenged or tries to persuade you to invest without doing your homework should ring serious alarm bells.

If you suspect that you have lost money in a pig butchering scam, you should contact your bank immediately. They will investigate the issue and seek to recover your money. At the same time, you should report the matter to Action Fraud, the national body that collates reports of online fraud on behalf of the police.

Pig butchering scams are a type of Authorised Push Payment fraud. If you feel your bank did not do enough to protect you and your money from the scam, are unhappy with their investigation, or disagree with the bank’s findings, including if they decide not to refund all or part of your losses, then a complaint can be made to the Financial Ombudsman Service (FOS). FOS is an independent government-backed body established to investigate disputes between financial institutions and their customers. They have the power to award refunds and compensation.

FOS has investigated many cases of APP Fraud and bank negligence. Banks are financial experts and should know much more about scams and how to spot them than their customers. They are responsible for keeping your money safe, stopping or delaying suspicious payments, and asking more questions about the purpose of new, unusual or frequent payments. They should also keep ahead of the latest tactics used by fraudsters, including the likes of pig butchering scams.