Pig-butchering, a type of investment scam involving fake cryptocurrency companies, has surfaced as one of the leading payment threats to consumers.
According to the Spring 2024 edition of Visa’s Biannual Threats Report, consumers are facing increasingly organized and sophisticated attacks from scammers, largely due to the rise of generative AI. This technology is being employed to exploit the most vulnerable aspect of payment networks: human targets.
The report notes that while the number of scams dropped between June and December, the financial losses associated with these scams have risen, indicating that their effectiveness has increased. Specifically, in pig-butchering scams, fraudsters are taking advantage of social media, particularly during holidays like Valentine’s Day and New Year’s Eve, to lure victims into phony online relationships and entice them to invest in non-existent cryptocurrency ventures.
In addition to pig-butchering, the report identifies inheritance scams, humanitarian aid scams, and triangulation scams as prevalent tactics employed by fraudsters. It also highlights several emerging trends, including targeted attacks on supply chains and third-party providers, as well as a staggering 300% rise in ransomware incidents during the same period.
“Thanks to generative AI and other evolving technologies, scams are more convincing than ever, resulting in unprecedented losses for consumers,” stated Paul Fabara, chief risk and client services officer at Visa. He added, “By increasing awareness of these emerging scams, we aim to equip consumers with another line of defense in the ongoing battle against fraud.”