‘Pig-butchering’ scams on the rise as technology amplifies financial fraud, INTERPOL warns

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Spencer Feingold, Digital Editor, World Economic Forum, Johnny Wood, Writer, Forum Agenda

• Digital scams, including investment fraud and people-trafficking deceptions, are on the rise, according to INTERPOL.
• The increase, the agency says, is due in part to the global embrace of new technologies.
• In 2023, scammers stole over $1 trillion from victims around the world.

Financial fraud is increasing worldwide as the public embraces new sophisticated technologies that create openings for online criminals, according to a new report from the International Criminal Police Organization (INTERPOL).

Last month, INTERPOL released its Global Financial Fraud assessment, which found that technology is “enabling organized crime groups to better target victims around the world.” Criminals, the report notes, are increasingly using deception strategies like so-called pig-butchering scams, which entail fraudsters gaining the trust of victims before stealing from them. The term relates to the idea of fattening up a pig ready for slaughter.

Pig-butchering scams often involve exploiting human relationship vulnerabilities as well as investment scheming to defraud victims. The scams also usually involve cryptocurrencies, which not all law enforcement agencies have the capacity to trace.

“The use of Artificial Intelligence (AI), large language models and cryptocurrencies combined with phishing- and ransomware-as-a-service business models have resulted in more sophisticated and professional fraud campaigns without the need for advanced technical skills, and at relatively little cost,” INTERPOL’s report states.

Criminal connections

INTERPOL’s report, which was intended for law enforcement use, notes that pig-butchering schemes are in part fuelling an increase in human trafficking for forced criminality in call centres.

Such human trafficking fraud is of growing concern particularly in the Americas. In December 2023, for example, hundreds of victims across South and Central America were lured through messaging apps and social media platforms with the promise of rewarding jobs, only to be forced to work in call centres to commit financial fraud crimes.

“We are facing an epidemic in the growth of financial fraud, leading to individuals, often vulnerable people, and companies being defrauded on a massive and global scale,” INTERPOL Secretary General Jürgen Stock said in a statement.

Stock added that “changes in technology and the rapid increase in the scale and volume of organized crime has driven the creation of a range of new ways to defraud innocent people, business and even governments.”

Online financial fraud trends

Leading global financial fraud trends include investment fraud, advance payment fraud, romance fraud and business email compromise. Mostly, these crimes are carried out by a network of people working together, either highly coordinated or loosely connected, INTERPOL’s report states. In 2023, scammers stole over $1 trillion from victims, according to the Global Anti-Scam Alliance.

Pig-butchering scams are prevalent in most regions of the world, with Asia emerging as a key region for this type of criminal activity. Gangs working predominantly from call centres in Southeast Asia, often target victims in Europe with deceptions aimed at facilitating various types of financial fraud.

Meanwhile, in the Americas, crime syndicates tend to focus on deceptions involving impersonation, false romance, bogus technological support, advance payment and telecoms frauds, INTERPOL notes. In Africa, business email compromise remains one of the most common financial crime trends.

Curbing the scammers

The World Economic Forum’s Global Risks Report 2024 includes adverse outcomes of frontier technologies, cyber insecurity and illicit economic activity as short- and long-term threats to the global economy. Yet there are known mechanisms to help curb online financial fraud.

Experts notes, for instance, that greater information sharing across sectors and between countries is a key part of efforts to combat online financial crime. This means eliminating safe havens for the perpetrators, while strengthening data collection and analysis to help detect and prevent financial crimes across different sectors and countries.

“We also need to encourage greater reporting of financial crime as well as invest in capacity building and training for law enforcement to develop a more effective and truly global response,” Stock added.

In January 2023, the World Economic Forum’s Partnership Against Cybercrime members launched the Cybercrime Atlas initiative to better understand the cybercriminal ecosystem. The Atlas aims to squeeze the space in which cybercriminals operate and map the cybercrime landscape, covering criminal operations, structures and networks.

“The Cybercrime Atlas is a collaborative research initiative that gathers and collates information about the cybercriminal ecosystem and major threat actors operating today,” Jeremy Jurgens, Managing Director, World Economic Forum, said in a statement. “The insights generated will help promote opportunities for greater cooperation between the private sector and law enforcement to address cybercrime.”