It is feared because in Southeast Asia, they kill or harm parents. It is generally believed that if someone hurts and swears at their father and mother, when the ungrateful person dies, they will become a Phi Pret. Another way to become a Phi Pret is to kill an animal without any guilt.
The Phi Pret reaches the same heights as coconut tree, but are thin with tiny mouths that barely a grain of rice can fit into, because they used to swear at their parents. They also have large hands the size of palm leaves symbolic of the way they used to hurt their parents with those hands. These hands are still capable of snapping a person's neck, given sufficient cause.
Phi Pret will often appear because they want to ask the living to do an offering for them.
In other countries, the Phi Pret is constantly hungry and have huge bellies to fill, but small mouths to eat with.
Outside of Southeast Asia, the Phi Pret are described as being "human-like, but with sunken, mummified skin, narrow limbs, enormously distended bellies and long, thin necks". This appearance is a metaphor for their mental situation of having been jealous or greedy people in a prior incarnations. As a consequence of their karmic offenses they are typically afflicted with an insatiable hunger, especially a craving for something very specific. The traditional stories of Phi Pret maintain that it is something repugnant or humiliating. A human corpse or feces, for example. In recent years, the legends have changed to a hunger for just about anything, but typically something strange and hard to come by.
There are stories of Phi Pret who prevent others from satisfying their own desires, using magic, illusions, or disguises to accomplish this. In these stories, the Phi Pret have the ability to turn invisible, and change their faces to instill fear.
Outside of Southeast Asia, Phi Pret are generally seen as little more than nuisances to mortals unless the Phi Pret has a craving for something like blood.
It should be noted that most people simply pity the Phi Pret. In a few Buddhist wat, monks will provide offerings of food, money, or flowers to them before meals. Sometimes you can find images of the Phi Pret licking up spilled water in temples or shown as balls of smoke or fire.
A Phi Pret's additional punishments and conditions may actually vary on who they were and what they did in a prior life. For example, some are said to have no problems finding the food they eat, but it will burst into flames while they swallow it, or it will dry up and wither before they can bring it to their mouths. Sunlight freezes them and moonlight burns them, or else they might be accompanied by additional demons who torture them for specific grievances, among other metaphysical inconveniences.
But what are the stories you've encountered regarding this spirit?