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MT CSI warns of the 'pig butchering' scam

Posted at 4:39 PM, Mar 20, 2024

The Commissioner of Securities and Insurance (CSI) office is going around Montana educating communities on what to look for in potential scam situations and who the most vulnerable targets are.

“We do see that seniors are scammed out of more money oftentimes because they have more money to them, whereas younger folks maybe aren't getting scammed as much because they don't have as large of the sum of wealth,” said Blair Stapleton, investor education coordinator for the CSI.

There are several different forms of scams that the State Auditor’s Office have seen on the rise in Montana, some being more common than others.

“One of the big ones that we're seeing is pig-butchering schemes. These are sort of a twist on the romance scam, they oftentimes involve cryptocurrency,” said Stapleton. “Folks are reaching out to targets online, usually through either a wrong number, text message or maybe through social media dating apps and they progress this relationship. Then eventually [they] either ask for money or try to offer investment advice. That's where the cryptocurrency comes in and folks are getting scammed out of a lot of money.”

The Financial Industry Regulatory Authority website explains:

Don’t trust that unexpected text or direct message from a stranger—it might be the first step in a “pig butchering” scam. So named in reference to the practice of fattening a pig before slaughter, these scams often involve fraudsters contacting targets seemingly at random, then gaining trust before ultimately manipulating their targets into phony investments and disappearing with the funds.

Pig butchering schemes often start with solicitations of modest investments intended to bolster your confidence. They usually involve some type of fake claim or falsified dashboard that shows assets exponentially growing, with the intent being to encourage larger and larger investments.

The CSI representatives say the best way to prevent being a victim to scams is to stay informed and up to date on what to look out for.

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“Education is the absolute best method of prevention, so just kind of by learning what is happening not only nationwide, but in Montana, to our neighbors here in Montana. It's important to learn what to look for,” Stapleton said. “We talk about the red flags because they are so pertinent, [and] they're oftentimes repeated in a lot of different types of scams.”

It’s important to always keep your guard up and know who you’re giving your information out to and how to report scams. For more information, visit the MT CSI website.