Secret Sister Gift Exchange is dangerous and illegal, says BBB

As a scam, at best, it’s essentially an elaborate new twist on the old “chain letters”. But the Better Business Bureau (BBB) warns, more seriously, those who chose to participate could find that they are involved in an illegal “pyramid scheme”.


Basically, the secret sister gift exchange promises that if you send one gift valued at $10 you will receive 36 gifts in return. According to the U.S. Postal Inspection Service, gift chains aren’t just „mathematically impossible”; they’re also illegal if they request money or others items of value and promise a substantial return to the participants.

“Those who get involved often do so thinking that the amount needed to participate is so small it’s worth the risk if they’ll receive gifts worth maybe a couple hundred dollars,” says Steve J. Bernas, president and CEO of the Better Business Bureau serving Chicago and Northern Illinois. “Also, I’m fairly certain that they have not considered the legality of participating.”

In addition to the loss of money in buying a gift, Bernas noted: “Prosecution for participating in pyramid schemes is determined by local authorities. However, the Federal Trade Commission has occasionally prosecuted pyramid schemes as deceptive trade practices, or fraud. And those convicted have had to pay fines and or spend time in prison.”

This holiday season the “Secret Sister” scam is not the only danger lurking on social media sites. Consumers should also be careful and not let their guard down to avoid being tricked by crooks who take advantage of the trust that we place in our online “friends”.

Some of the ways that consumers are ripped-off on social media sites include:
Fake Profiles – Be careful who you “friend”. If you friend someone you do not know you will be giving them access to your postings, personal information, and your list of friends as well. Posts from these friends may contain links to other pages that will infect your computer with malware, if clicked, or trick you into visiting other scam sites.

Hacked Profiles of Friends – If a friend’s status states they just got a free tablet by answering a few questions, their page may have been hacked. Do not click on any links you find in the post as that may lead to identity theft.

Message Scams – Be careful if you post questions asking for help in finding a particular gift and receive a message from someone you don’t know offering to sell you the product. This could be a scam. Do not send any money until you have verified who the person is and set up a method to receive the product – before full payment is made.
When going online to shop or simply to check your email, Bernas urges people to treat all messages with a measured amount of caution.

“Don’t assume someone is sending you something simply to be nice,” the BBB president explains.  “Unfortunately in today’s digital world, the optimism we all like to see and hope for needs to be tempered with a healthy dose of skepticism.  Ask yourself: Why am I receiving this?  Do I know this person or company? What could happen if I open it or provide the information they request?”

As more people are online during the holidays, cyber-crimes in general tend to increase. The BBB recommends consumers watch carefully for these email scams:
Ransomware Scam – A new type of ransomware called “cyptolocker” has been identified. The virus sent via email, when downloaded will encrypt the contents of the victim’s computer and until the ransom is paid the files will remain locked.

Bank Account Scam – An email claims your bank account has been compromised and ask that you reply to the email and provide personal information. The goal capture your account number, address, social security number and other information.

Charity Scam – Emails are sent requesting donations asking for credit card information or direct you to a bogus website where the information is collected.

Malicious e-cards – Do not open electronic cards from individuals you do not know. Doing so could download malware to your computer.

Bargain basement email – Beware of emails with promotional offers and bargains. Do not follow links in the email which can lead you to bogus websites where your credit card and personal information can be collected.

For more information on scams, visit, like us on Facebook, follow us on Twitter or add us on Pinterest.

ABOUT BBB: For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2014, people turned to BBB more than 165 million times for BBB Business Reviews on more than 4.7 million businesses and Charity Reports on 11,000 charities, all available for free at The Council of Better Business Bureaus is the umbrella organization for 113 local, independent BBBs in the United States, Canada and Mexico, as well as home to its national programs on dispute resolution, advertising review, and industry self-regulation.