The Facebook Secret Sister gift exchange may look like a fun Christmas activity. But it’s a scam that preys on the vulnerable, lonely and gullible, reported the Sydney Morning Herald on Nov. 11. Facebook users are urged to beware of this social media pyramid scheme. The Secret Sister gift exchange works kind of like a chain letter. Requests come from Facebook friends and family to join them for a “secret sister gift exchange.” As in a chain letter, you are told to send the letter six friends. You mail a gift to the first “sister” on the list. add your name to the end. Your friends do likewise and you all wait for your gifts to arrive. Only the gifts never come because this is an MLM (multi-level marketing) pyramid scheme. In most cases, only one person collects presents. And the Secret Sister gift exchange scam is illegal for the same reason a chain letter or pyramid scheme is illegal: they are fraudulent.
There are many posts on Facebook claiming to have received gifts through the Secret Sister gift exchange. But they are likely the ones perpetuating the chain letter scam. Their names are at the top of every list so they are the only ones on the receiving end. Are you surprised that anyone would fall for this gift exchange scam? Sadly a lot of people have. Many think it’s a neat way to get lots of presents and only have to purchase one gift. They see it as similar to a cookie exchanges where everyone trades a dozen cookies. But the Secret Sister gift exchange is problematic because it happens in virtual reality. There’s no way to assure that people will actually participate. That’s part of the FCC’s problem with a chain letter. Even those that didn’t involve money, like recipe exchanges, are illegal because they’re vulnerable to exploitation, racketeering and pyramid scheme.
Not every online chain letter gift exchange turns out to be a scam. But they are all illegal because they could lead to fraud. Many such online chain letters like Secret Sister gift exchange have proved to be a pyramid scheme because they promise compensation in exchange for emails, friend lists, etc. And even if you do get all six promised presents, it is still illegal because a chain letter is a form of solicitation or gambling. Anytime someone offers a high yield for a low investment, it’s considered a kind of “bunco” (solicitation, gambling, extortion, racketeering). So if you participate in the Secret Sister gift exchange, you’ll most likely be out your initial gift price but you could also face charges. You could also be the victim of identity fraud and account hacking because you gave your address to an untrustworthy source. If you did as the Facebook post suggested and bought your gift online, your credit card account could be compromised as well. At the very least, expect a lot of spam emails and sales pitches. If you’ve already played the Secret Sister gift exchange, you may want to change your password and watch for hacking or solicitation. If you really want to do a Christmas gift exchange, organize one among your friends where you each only get one gift.