BBB: Viral ‘Secret Sister’ gift exchange is a scam

If a stranger on the internet promises you a Christmas gift for a $10 buy-in and some personal information, it probably isn’t legit, the Better Business Bureau warns. Not only will you be conned out of a gift, but you might have accidentally joined an illegal pyramid scheme.

“Secret Sister,” an internet-wide gift exchange that tasks users with fulfilling each others’ Christmas lists, is an illegal scam that could put personal information at risk, the consumer watchdog nonprofit said.

The concept is harmless enough: Facebook users recruit “sisters” with the promise that they could receive up to 36 gifts –as long as they buy a $10 gift for a stranger on the internet, provide their name, address and email and recruit some more friends to join, the BBB said.

But users often don’t know who they’re buying gifts for or whether those internet strangers will return the favor. And they don’t know what these strangers will do with their personal information, which could open them up to cybersecurity breaches, the BBB said.

Like any pyramid scheme, this one thrives on continued recruitment — the bigger the pool of participants, the longer it’ll keep running. But once users stop joining, the gifts stop flowing and all the gift givers waiting on their presents are left disappointed.

How to avoid a scheme

Some pyramid schemes masquerade as legal multilevel marketing companies, which also rely on continued recruitment with often minimal returns. The major difference, according to the Federal Trade Commission, is that pyramid schemes are against the law.

Don’t trust strangers on the internet with your personal information, the BBB advises. If handing over emails and addresses is required to partake in a gift exchange, keep scrolling.

If a venture runs on recruitment, doesn’t sell a genuine product or service and promises high returns in a short period of time, it might be a pyramid scheme, the US Securities and Exchange Commission says. Some are less formal than others, like “Secret Sister,” and could take shape on social media, online ads or YouTube videos.

Some schemes claim they’re supported by the government. They aren’t, the BBB says, because they are illegal. And more than likely, they won’t make good on their promise because all pyramid schemes eventually run out of participants and fail.