Alarming reports have emerged about a crypto investment scam that’s so heinous it sounds fictional. Dubbed “pig butchering” because of the amount of time and care that goes into “fattening up” the victims, this scheme involves targeting people on social media, dating sites and WhatsApp, developing trust with them over days or weeks and manipulating them into buying crypto on a phony trading platform. The site makes the investor believe they are earning large returns, but once they try to withdraw the funds, they are told they have to pay a large tax bill, and then the entire site disappears — as does the online “mentor” who pulled them into it. Victims have lost up to millions of dollars, often seeing their life savings wiped out.
How can people be taken in by this? It works because the scammer follows a detailed script and invests a great deal of time in building trust with the victim. The scammer sends pictures showing their life of luxury, portraying themself as a wealthy investor, eventually sharing the “secret” to their success and encouraging the victim to likewise invest and earn amazing profits. The website is well developed and looks convincingly legitimate, even providing hundreds of pages of training materials for new “investors.”
Such a complex scheme requires a large labor pool to pull it off. But rather than hire other unscrupulous people to staff it, the criminals behind this syndicate are running another scam: luring young workers to Cambodia with the promise of call center jobs, only to kidnap them and force them to become indentured servants at scam centers. That’s right: the scammers who are grooming the victims are also victims themselves. In one case, 7,000 of these forced laborers were rescued from a single call center, and the profits to the organized crime behind it are estimated in the billions of dollars.
The key to this scam is developing trust from strangers online. Using well-known psychological tricks baked into a detailed script accompanied by fake photos, the scammer convinces their victim to drop their guard and to become emotionally attached. This is even easier on dating sites, where the victims are actively seeking new connections. The professional-looking trading platform and occasional payouts help remove any remaining doubts that this is a legitimate operation.
The sad fact is that with advances in technology, it’s easier than ever to pull off these types of elaborate scams. It’s no wonder that 44% of consumers around the world say that identity verification is “very important” for social media. Smart businesses are taking note and are wasting no time in enhancing their customer due diligence processes during onboarding and beyond.
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Fortunately, there are good companies like Jumio who are using cutting-edge technology to fight fraudsters. Our mission is to eradicate the very concept of identity fraud and to make the internet a safer place to do business. Using our AI-driven identity verification solutions, online businesses such as social media platforms and dating sites can ensure their users are who they say they are, keeping fraudsters off their platform and away from their legitimate customers.
Establishing trust online has never been more important. Find out how Jumio can help you protect your business and your customers from fraudsters around the globe.