In Papua New Guinea, the invasive species has reportedly earned a reputation as the "ball-cutter" after castrating a couple of local fishermen.
It doesn't sound totally implausible as they feed on nuts and invertebrates, but it does sound a bit like an urban legend.
How well documented are these "ball" attacks? Have pacu bitten people otherwise? That would make the story slightly more plausible.
One person was attacked on the genitals by a pacu in New Guinea prior to 2001; and possibly others have been attacked on other parts of the body; c.f. the last page of this July 2001 newsletter from the New Guinea Fisheries Department (via waybackmachine; a broken link to this appears in the relevant Snopes article). There is no indication in this report that the testicle was detached.
With regards to local newspaper reports that people are being killed by the Pacu Fish, the investigation has revealed the following;
- Within the area between Korogu village and along the Sepik River to Wagu village (up river from Ambunti Government Station) only one person was attacked on his private part. This person required medical treatment and came from Korogu village. A lady also claimed to have been bitten by the Pacu on her legs, just above her knees. She had some scars present.
- No deaths from the introduced Pacu Fish attacks were reported from Korogu to Wagu villages.
Though native to South America, the pacu was introduced to New Guinea in the 1990's (ref. above).
Though this is not authoritative, there was an episode of River Monsters about pacu attacks on people. I believe this is relevant in that it includes interviews with locals who do claim that pacu can/do attack people in New Guinea (despite being herbivorous). So that at least provides an indication that at least one person is willing to "go on record" with the story that these fish do injure people. Whether these accounts are credible is a different question.
The Wikipedia page on Pacu reports on this joke that was taken more seriously than intended.
A 2013 CNN article follows the origin of the story to a comment by a professor at the Copenhagen Museum of Natural History, who later explained he was joking.
William Fink, a piranha researcher at the University of Michigan who is also curator of fishes at the school's Museum of Zoology, poured water on the pacu warning. For one thing, he said, pacus are vegetarian -- and there's no record of them attacking a human.
