Avoid the Traps of Financial Scammers
By Claire McHenry Deputy Director, Bureau of Securities, Nebraska Department of Banking and Finance Nebraska is seeing an increase in a type of scam tied to cryptocurrencies and social media called “pig butchering.”
This has nothing to do agriculture; it’s a scam initially developed by criminal organizations in China in which scammers develop a relationship with their victims over a long period of time to repeatedly steal money.
This form of fraud is also known as a relationship scam, financial grooming, or confidence scam.
How Pig Butchering Works Scammers often initiate contact by sending a “wrong number” text, email, or social media message – or by reaching out through a dating app. They take their time to set the “hook,” which is why pig butchering can often include some version of a romance scam or affinity fraud, which occurs when a con artist targets members of a group based on race, age, religion, or other factor.
AARP describes the setup this way: “Scammers connect with you online, form a relationship, then lure you into bogus cryptocurrency investments. The criminal may take weeks or months to establish trust – grooming the victim – and find commonalities (‘You’re a widow? I lost my spouse as well…’), before eventually mentioning they’ve made a lot of money on a certain investment (‘Maybe you’d be interested in giving it a try?’).”
It Can Happen to Anyone These scammers will target anyone, regardless of their level of financial sophistication.
This is why online financial scams are growing at a breakneck pace. The U.S. Federal Trade Commission (FTC) notes that in 2024, Americans reported losing a record $12.5 billion to fraud and scams.
Because scammers spend so much time building relationships with their targets, victims often don’t realize that they’ve become a victim.
In a well-publicized case, a Kansas banker fell victim to a pig butchering scam. He was so convinced the scam was legitimate that he stole $47 million from his own community bank to feed this scheme. This resulted in the loss of shareholders’ savings, the closure of the bank, and a 24-year prison sentence.
Know the Warning Signs All of us should take steps to protect ourselves and loved ones from becoming victims of financial scams, including pig butchering. Here are some warning signs and precautionary steps:
• Unexpected contact: Never respond to unsolicited messages from unknown contacts, especially text messages or messaging apps.
• Playing with your emotions: Fraudsters will often use their knowledge about you to appeal to your emotions. Be careful about what you share online and with people you’ve never met.
• Artificial intelligence and deepfakes: Be wary of AI-generated images, audio, and video. Slow down and consider what you are looking at, especially if it triggers your emotions.
• Request for financial information: Don’t share personal financial information with individuals you’ve never met in person.
• Exaggerated claims: Take a closer look at any investment that offers much higher-than-average returns or is touted as “guaranteed.”
The Nebraska Department of Banking and Finance (NDBF) has launched a financial awareness initiative called “Make Cents Make Sense.” A key part of this program is dedicated to fighting fraud and helping protect Nebraskans from financial scams.
When you visit MakeCentsMake-Sense.Nebraska.gov, you’ll find valuable, no-cost resources, including printable assets like a handout that details pig butchering, as well as a list of steps to take if you have already been scammed.
If you’re a victim of financial fraud, or if you’ve identified something that looks like a scam, contact the NDBF at (402) 471-2171 or file a complaint online. We’re here to help.
