Secret Sister: An Illegal Pyramid Scheme

It’s baaaack! The “Secret Sister” holiday gift scam has reared its crooked head again, just in time for the holidays.

While the festive season brings lots of joy and cheer, it also brings out the grinches who are looking to steal not only your holiday bliss but also your identity and peace of mind.

How it plays out:

What seems like a fun way to bring cheer to many within the social media-verse is an illegal pyramid scheme, according to the U.S. Postal Inspection Service (USPIS).

Akin to the old-timey chain letters of days gone by, the Secret Sister gift exchange calls for participants to buy one gift of at least $10 value and send it to your “secret sis.” In exchange, they are promised to receive 6-36 gifts in return.

The catch is that participants need to provide their personal information and provide information about their social network members. Those people have to provide their friends’ information, and so on, and so on…

Once the chain is broken — which is usually the case, especially during the holidays when nobody has time to shop for and ship a present to a stranger — the original participant is out $10 and will probably never get one gift, let alone 36!

Just like any other pyramid scheme, according to the Better Business Bureau (BBB), Secret Sister counts 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.”

The USPIS considers gift exchanges (newer scams feature exchanging bottles of wine) a form of gambling. Participants could be charged with mail fraud as well as face fines and jail time.

When the scam first appeared on Facebook in 2015, the USPIS posted, “Fraudulent pyramid schemes typically violate the Lottery Statute (Title 18, United States Code, Section 1302). They contain all three elements of a lottery: prize (expectation of monetary or other gains from participation in the pyramid); chance (the monetary return you may receive from your participation is entirely up to chance, that is, dependent on the efforts of those below you in the pyramid) and consideration (the price of your gift to join the pyramid).”

Protect yourself:

Delete it:  Even though it seems lovely to receive many gifts from all over the globe, it could cost you your identity and freedom. Disregard any social media post, email, or letter asking to be a Secret Sister.

Report it: Let the social media platform you’re using know about the circulating scheme by clicking on “report post.”

Protect it: Restoring your identity is no joke! Keep your private information to yourself.

Question it: Some of these fraudsters have the gall to claim these schemes are not only legal but are endorsed by the U.S. government. Nothing could be further from the truth! Pyramid schemes are illegal and would never be promoted by any government agency.

Don’t get on the naughty list this holiday season. Steer clear of the Secret Sister or any other social media gift exchange, keep your money and your identity safe, and jingle all the way to a happy holiday!