Say a friend on Facebook invites you to join in a holiday gift exchange. All you have to do is send one gift worth $10 to your "secret sister," and you will receive anywhere from six to 36 gifts in return.
It might sound fun and harmless, but these so-called "secret sister" posts making the rounds on social media are a scam.
The scheme first went viral in 2015 on Facebook and other social media sites, and it’s making a reappearance this holiday season, according to the Better Business Bureau.
Here’s how it works: Six people invite six of their friends to participate and all 36 people send gifts to "secret sister number one" on a list. The process then repeats for "secret sister number two" on the list, and so on.
However, there’s no guarantee that you will actually get back 36 gifts in return for your initial $10 investment. A few people at the top of the list might benefit, but as the list goes on, it gets harder and harder to recruit new friends for the challenge and the whole things falls apart.
This is not only a potential rip-off, but also a kind of illegal pyramid scheme, says Katherine Hutt, director of communications for the Council of Better Business Bureaus.
“Legally, it falls in the category of illegal gambling because you are betting that you’ll get back more than you put into it,” Hutt told TODAY Style.
Participating in a pyramid scheme can carry hefty legal penalties, according to the U.S. Postal Inspection Service.
“If you are convicted federally, you may be fined or imprisoned not more than two years, or both; and for any subsequent offense you may be imprisoned not more than five years,” the Postal Inspection Service cautioned in a public Facebook message. “But there’s more than federal prosecution to worry about. Many states have anti-pyramid laws on the books that call into question the legality of these activities.”
Apart from the legal dangers, signing up for a "secret sister" gift scheme can put your privacy at risk. Participants must provide a home address — and possibly other personal information — on the list that circulates among strangers.
Of course, most people who post these gift exchange invitations are probably not aware of the legal risks, and they are probably not out to deliberately harm others, Hutt says.
“It’s not a scam in the traditional sense,” she told TODAY. “I don’t think anybody’s participating in this for nefarious reasons. But pyramid schemes are illegal … you shouldn’t do it, and we’re urging people not to do it.”
Hutt recommends that if you see friends posting these "secret sister" requests, either ignore them or refer them to the Better Business Bureau’s information page about the scam.
And while the "secret sister" posts tend to pop up around the holidays, Hutt says it’s always worth being on the lookout for pyramid schemes on social media.
“We’ve seen lots of variations on it. You know, there’s one that’s a wine exchange. They come up periodically,” she said. “More often, you see more traditional pyramid schemes that are talking about larger dollar items. Those are the ones that are a bigger concern for us. But we just don’t want people to get ripped off, and we don’t want them to get caught up in something that is illegal and that they shouldn’t be doing.”
This story was originally published on Nov. 14, 2018.