FORT MYERS, Fla. — A “Secret Santa”-esque gift exchange has been widely spread across social media during the holiday season since 2015. Albeit interesting — it’s actually an illegal pyramid scheme, according to Better Business Bureau.
The viral post usually lays out the rules for a “Secret Sister” gift exchange that promises participants will receive 36 gifts, in exchange for sending one gift. Each year, the scheme pops back up.
A popular version of the exchange suggests purchasing $10 gifts online, specifically on Amazon.
How the scam works
The scam begins with a seemingly trustworthy invitation, either by email or social media, to sign up for what seems like a fun, great program, according to the BBB.
It seems foolproof. All you need to do is provide your name, home address, and the information of a few additional friends, and put the information on a list that’s already started of people you’ve never met on the internet.
Then, you send a modest gift to a stranger along with their friends, family and contacts.
The cycle continues and you’re left with buying and shipping gifts for unknown individuals, in hopes that the favor is reciprocated by receiving the promised number of gifts in return. But, it doesn’t happen.
Just like any other pyramid scheme, it relies on the recruitment of individuals to keep the scam afloat. Once people stop participating, the gift supply stops, and leaves hundreds people are disappointed and without their promised gifts.
Pyramid schemes are illegal in the US and Canada.
The U.S. Postal Inspection Services explains that these gift exchanges are considered a form of gambling and that participants could be subject to penalties such as jail time, fines or a lawsuit for mail fraud.
An added level of danger to these schemes is potential identity theft, according to the BBB.
When signing up, the alleged campaign organizer is asking for personal information such as a mailing address or an email. With just a few pieces of information, cyber thieves could commit identity theft.
Here’s what to do if you come across one of these scams:
- Ignore it! Keep in mind that pyramid schemes are international. Chain letters involving money or valuable items and promise big returns are illegal. Stop and ask, is it worth breaking the law? Report it instead to Canadian agencies or to the U.S. Postal Inspection Services.
- Report social media posts. If you receive an invitation to join a pyramid scheme on social media, report it. You can report these Facebook posts by clicking in the upper-righthand corner and selecting “Report post” or “report photo.”
- Never give your personal information to strangers. This will open you up to identity theft and other scams.
- Be wary of false claims. Some pyramid schemes try to win your confidence by claiming they’re legal and endorsed by the government. These imposter schemes are false as the government will never endorse illegal activity. No matter what they claim, pyramid schemes will not make you rich. You will receive little to no money back on your “investment” or gift exchange.
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November 16, 2020 at 12:15AM
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Scam Alert: Social media gift exchange is an illegal pyramid scheme - NBC2 News
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