‘Secret Sister’ gift exchanges are actually pyramid schemes, according to Better Business Bureau

Law and Order

A gift exchange called “Secret Sister” that has spread through social media is actually just a gift-wrapped pyramid scheme, according to the Better Business Bureau.

The name sounds like it is just another “Secret Santa” experience, in which coworkers, family or friends agree to all anonymously match up and give each other gifts. But BBB is warning that the so-called “Secret Sister” exchanges are scams that require participants to be continually recruiting more people.

According to the BBB statement, a Secret Sister exchange is a gift exchange conducted through social media. It became popular through Facebook first in 2015, BBB said.

The concept is advertised as a way to connect people and spread the joy of the holiday season — cheery posts or group invitations spread through Facebook claim that all participants have to do is purchase one gift, usually valued at around $10, provide basic information such as their full name and address, and encourage their friends and acquaintances to sign up as well. They would receive info on where to send their gifts later, BBB said.

BBB reports that some of these posts promise that participants could receive up to 36 gifts by participating.

After signing up, your information joins a list made up of the strangers who signed up before you. You then have to send the list and the invitation along to your own friends, and wait for further instruction.

While the idea of purchasing a gift for a stranger and being matched up anonymously may sound charming, the problem is that “it relies on the recruitment of individuals” in order to keep the plan going, BBB said, “just like any other pyramid scheme.”

Without a maximum cap of people and an even number of people to match up like in a regular Secret Santa, the gift supply ends when the chain fails to find new participants. This means that hundreds of people could end up disappointed, not having received any gifts in return themselves.

Pyramid schemes are illegal in both Canada and the U.S. In Canada, any person who operates a pyramid scheme could be handed a fine of up to $200,000, and could be imprisoned for up to five years if indicted.

The U.S. Postal Service specifically identifies the Secret Sister exchanges as an example of a pyramid scheme on their website.

Another danger mentioned by BBB is the fact that the campaign organizer ends up with a long list containing the personal information of countless people — which could be dangerous if it got into the wrong hands.

If you see a Secret Sister exchange or a similar experience being spread on Facebook, you should ignore it, warn the friends who may be about to get involved, and report the social media posts.

Source: CTV, 15 Nov 2019.

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