State warns of damage wrought by financial scams with disturbing label: 'Pig butchering'

SALEM, Ore. (KTVZ) – The Oregon Division of Financial Regulation is warning consumers to be wary of an unexpected text or direct message from a stranger – it might be the first step in a scam with a disturbing label: "pig butchering."

The term pig butchering comes from the practice of fattening a pig before slaughter. These scams often involve fraudsters contacting targets seemingly at random, using social media or common communication apps.

The scammer gains the victim's trust, often by starting a romantic relationship or a simple friendship. The scammer then starts to convince the victim to invest in phony investments, including fraudulent cryptocurrency schemes, before falsely claiming the initial investment grew significantly.

The scammer then asks for more and more money, and demand multiple types of fees if a victim requests to withdraw the funds.

Even when the victim pays the withdrawal fees, the fraudster does not refund the victim's money, but rather disappears with the funds without any further communication.

According to the Financial Industry Regulatory Authority (FINRA), there are several warning signs to be aware of involving these types of scams:

"Romance scams and crypto scams continue to be the source of significant losses for consumers," said DFR Administrator T.K. Keen. "Consumers who receive contacts out of the blue through messaging apps on their phone or other means should be especially suspicious of those trying to entice them into cryptocurrency investments."

Although the division said it has not received any complaints specific to pig butchering schemes, it knows that this activity is occurring, based upon conversations with federal and nearby state law enforcement authorities. Several states and federal authorities have issued warnings on this sort of fraud.

In 2022, investment fraud caused the highest losses of any scam reported by the public to the FBI's Internet Crimes Complaint Center (IC3), totaling $3.31 billion.

Frauds involving cryptocurrency, including pig butchering, represented most of these scams, increasing 183 percent from 2021 to $2.57 billion in reported losses last year.

The division accepts consumer complaints and will forward to the appropriate law enforcement authorities. Consumers can also make a complaint to the FBI's IC3 at https://www.ic3.gov/.

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About Oregon DFR: The Division of Financial Regulation is part of the Department of Consumer and Business Services, Oregon's largest business regulatory and consumer protection agency. Visit dfr.oregon.gov and www.dcbs.oregon.gov.​​

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