BBB warns of Secret Santa Scams

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MOBILE COUNTY, Ala. (WKRG) — Monde Donaldson with the BBB Serving Central & South Alabama spoke with WKRG News 5 about Secret Santa scams during the holiday season.

“Secret Santa” around the office, or with friends and family can be fun. A gift exchange among online friends you haven’t met, well, that’s a little different and carries a heftier consequence. These gift exchanges, while they look like innocent fun, are really pyramid schemes – and are considered illegal.

The “Secret Sister” gift exchange campaign quickly became popular several years ago through Facebook posts promising participants would receive up to 36 gifts, in exchange for sending one gift. Each holiday season, the scheme pops back up.

BBB Serving Central & South Alabama
  • What does it look like this year?

 A newer version of this scam revolves around exchanging bottles of wine; another suggests purchasing $10 gifts online. You might see references to receiving “happy mail” or doing the exchange “for the good of the sisterhood.” Other 2020 versions include this text: “If there’s EVER been a year we need random fun presents to come in the mail IT’S 2020!!!!!!” or “And Grinches who say this is a scam… It’s 2020.”

  • How does the Scam Work?

The scheme starts with a convincing invitation, either by email or social media to sign up for what seems like a great, fun program. All you must do is provide your name and address and personal information of a few additional friends, and tack this information on to a list that’s already started of people you’ve never met on the internet. Next, it’s your turn to send an email or social media invitation to send a modest gift or bottle of wine to a stranger along with their friends, family and contacts.

A newer twist on the idea asks you to give your etransfer email and asks users to pick a name off of a list and send money to strangers, to “pay it forward.” 

The cycle continues and you’re left with buying and shipping gifts or money to unknown individuals, in hopes that the favor is reciprocated by receiving the promised number of gifts in return. Unfortunately, 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 in the gift exchange, the gift supply stops as well, and leaves hundreds of disappointed people without their promised gifts or cash.

  • What else can happen?

There is another layer of danger to participating in these schemes. 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 expose you to future scams or commit identity theft.

  • What should people do to avoid this scam? 

Ignore it! Delete, don’t answer block. Do whatever it takes. It is not real. 

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.  We can classify these as pyramid schemes. 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.

Report it to BBB.org/Scamtracker.

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