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Money Management

Watch Out For Secret Sister Gift Exchange Holiday Scams

The Better Business Bureau warns that taking part in these “exchanges” may involve you accidentally entering an illegal pyramid scheme.

The “Secret Sister” gift exchange is an online gift exchange where people from all over the place are tasked with helping each other fulfill their Christmas wish lists. While the underlying concept sounds harmless, there are no guarantees that each side will fulfill their promises. The exchange is typically illegal and involves participants sharing personal information, which can become risky in the wrong hands. In this way, scammers can cheat participants out of gift cards and other items.

According to the BBB, the scam starts with an invitation to sign up for a seemingly fun program via email or social media. They ask you to provide your name and address, plus the same information about some of your friends. It’s then your responsibility to do the same for your friends and family. The catch is that this information is often tracked, and the scheme continues. You may end up sending gifts to people you never met and receiving nothing in return. Like other pyramid schemes, this one relies on participants finding new recruits, and if that stops, so does the supply of gifts.

Please note that this “exchange” structure is illegal in the US and Canada. The US Postal Service considers these kinds of “gift exchanges” to be a form of gambling. If you participate, you may face charges for mail fraud and/or illegal gambling, which can lead to fines or jail time. The BBB recommends you ignore invitations to participate and that you report social media posts to the platform for abuse. As always, protect your personal information and don’t share it with strangers online.

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