TOPEKA, Kan. (KSNT) – A new brand of investment fraud is on the rise and looking for potential victims in the Sunflower State.
The Kansas Insurance Department (KID) issued a press release Friday detailing how a new type of scam called “pig butchering” is being used to take advantage of people. Just like fattening up a hog before the slaughter, scammers work to slowly build trust with their victims before “butchering” them with one last fraud, according to the KID. The scammer then walks away with the victim’s cash.
Kyle Strathman, public affairs manager for the KID, wrote that the Office of the Kansas Securities Commissioner keeps tabs on this type of scam. Furthermore, pig butchering scams are considered by KID to be one of the fastest-growing investment frauds in the country. Citing data from the Federal Bureau of Investigation, Strathman wrote that these types of scams totaled $3.31 billion in reported losses for 2022 alone.
Strathman wrote that pig butchering scams usually roll out in stages. First, scammers make contact with potential victims through texts or messaging apps, most of the time with an unusual explanation for contacting them. The fraudsters then engage victims in non-investment-related talks to build trust over time and gather information to manipulate them later on.
Strathman wrote that once the victims are comfortable with the scammers, they shift the conversations to investment topics. The scammers try to convince their victims to allow them to invest their cash in what appear to be legitimate enterprises, usually through phony brokerage accounts or cryptocurrency platforms. As the scam goes on, fraudsters pressure victims to deposit larger amounts of cash after faking investment gains. Once the large deposit is finished, the fraud is complete, and the scammer flees.
“Pig butchering scams are a sophisticated take on the romance scam and are often targeted at those who are more isolated and therefore more vulnerable,” said Kansas Insurance Commissioner Vicki Schmidt. “Protect yourself by ignoring unsolicited offers, and be on alert for anyone offering investment opportunities via text or messaging app.”
You can find more information on how to report insurance fraud online through the KID’s website by clicking here. The Kansas Attorney General’s Office also maintains various resources to help those who are the victims of scams. You can find more information online by clicking here.
