We do nearly everything virtually, from ordering groceries to catching up with friends. Since we accomplish so much online and from our phones, you may consider investment opportunities that are virtual, too. You bank online, why not invest online?

Here’s why.

While it may be tempting to try a new investment when what looks like a great opportunity comes your way, it is best to practice caution with these type of “pop-up” opportunities. Scams for online investments are on the rise. The Federal Bureau of Investigation (FBI) has noted a 33% increase in these types of crime from 2023 to 2024 in their most recent internet crime report‡.

You are probably already familiar with various investment frauds. Investment fraud is not new. It can take on many forms, some of which you have likely heard of, like Ponzi schemes and broker embezzlement. But the latest in investment scams – sometimes called pig butchering – is quickly growing in popularity.

While the name itself is enough to catch your attention, review these tips to ensure you don’t get caught up in one of these schemes.

What is a pig butchering scam?

A pig butchering scam is a type of investment fraud that combines social engineering with cryptocurrency. It preys on the newness and complexity of cryptocurrency and similar investment opportunities to encourage participation without complete understanding by you, the investor.

Here are the steps common in a pig butchering scam:

  1. Social media introduction. Many times, this opportunity is presented on a social media platform or other virtual platforms like dating apps or even “wrong number” text messages.
  2. Introducing the scam and building trust over time. Once you have begun correspondence, the scammer will continue to develop a relationship with you, often for months, to get to know you and make you feel comfortable around them.
  3. Investment deception with cryptocurrency. When the scammer finally feels comfortable, they will share information about their investment opportunity, that is often facilitated through cryptocurrency, and how they are a successful participant themselves.
  4. The platform. The scammer will then drive the user to a fake investing platform, getting them to input their funds into the app. From there, depending on how complex the scam is, the scammer could even give the user a return on investment to encourage them to keep investing. This is the “fattening” of the pig.
  5. The downfall. Eventually, when the user tries to receive their earnings, they will have trouble accessing and realize that the platform isn’t what they had been sold. They will often encounter fake issues like large sums or taxes to withdrawal their money, or the withdrawal simply won’t work. This is the “butchering,” when the scammer eventually steals the investor’s money, and ghosts them.

It happened to me. What do I do?

That sinking feeling hits. A deposit you made doesn’t seem right. What do you do now? Can you get your money back? Can these scammers take even more from you now that they have your information?

First, try not to panic. This could – and does — happen to anyone. These schemes are becoming so advanced and so seamless that falling victim is not uncommon.

What’s most important, once you’ve realized the issue, is to act.

Victims of investment fraud, specifically those involving cryptocurrency, reported the most losses in 2024—totaling more than $6.5 billion, according to the FBI.

When it comes to the aftermath, there are several steps you can take.

First talk to your bank. You’re going to want to freeze your accounts. Your banker can walk you through the correct steps to protect yourself from further damage.

Next, the FBI recommends filing a complaint‡ through the IC3, or the internet crime complaint center. This database houses complaints from the public that the FBI uses to gather data and trends to help consumers.

Finally, you can submit a complaint to the securities and exchange commission (SEC) office of investor education and advocacy‡. This website also offers resources to help you learn more about online scams. You may also submit a report to the FTC‡.

These scammers are counting on your embarrassment hindering you from taking any action at all. Protect yourself and others by speaking up.

Red flags to know and remember

If you are interested in cryptocurrency investments or any new investment requiring its own platform or with new digital tools, take your time with it. Go slow and make sure you are pausing at every step to consider your situation and ask questions.

Here are some very common scenarios and phrases a scammer may use in these situations that you can watch for:

  • Too good to be true returns. Promises of consistently large returns, regular income, or claims of no risk are all things that should give you pause.
  • Scammers will often try to give false credibility to earn your trust. If a person is insisting that as “head of investments” at a company, this investment is a good one, that’s a concern.
  • If someone is talking to you about an investment and insists, they, among others, all successfully invest in this platform, it may be a sign that it is not trustworthy.
  • Watch out for other communication red flags as well, like not answering your questions or high-pressure sales tactics, encouraging you to “buy now or miss out!” Anything encouraging speed should cause you to slow down instead. Also keep in mind a proper advisor will never ask you for private information over text or the internet.

Investing shouldn’t be scary under the right conditions and with the guidance of a trusted financial professional.

Before investing with a new broker of any kind, consider the following steps:

  • Check their credentials
  • Visit the SEC’s Investment Adviser Public Disclosure (IAPD) website to look for them or their company
  • Contact your state securities regulator about this person or company
  • Check SEC Action Lookup tool for formal actions that the SEC has brough against individuals

The bottom-line: Don’t let embarrassment or lack of understanding keep you from asking questions or even reporting your suspicions of an investment opportunity or advisor.

At UMB, we care about protecting your wealth and our role as your trusted financial institution. View our roundup of fraud protection advice and visit UMB’s Financial Education Center for more resources on protecting your financial future.

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.