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BBB warning ‘Secret Sister Gift Exchange’ is illegal scam

(CBS 58) -- With gift exchanges becoming more popular with the upcoming holiday season, the Better Business Bureau is warning about the online "Secret Sister Gift Exchange," which is said to be an illegal pyramid scheme. 

The exchange has been circulating on social media sites and claims that participants will receive up to 36 gifts in exchange for sending one $10 gift. 

Users are encouraged to invite others to participate in the holiday gift exchange where they will receive information on where to mail gifts. 

The BBB says as gift exchanges grow in popularity during the holiday season, be careful when choosing one to participate in. According to the U.S. Postal Inspection Service's gambling and pyramid scheme laws, gift chains like the Secret Sister Gift Exchange are illegal and those who participate could face penalties for mail fraud. 

Here is how this scheme works: If a consumer purchases one gift for a stranger, she will receive as many as 36 gifts in return. This type of gift exchange may seem reasonable enough in theory: six friends invite six more friends, who all send gifts to the participant in spot 1 before that person’s named is removed. This process repeats itself with the participant in the 2 spot, and so on.

Of course, starting this gift exchange comes with a catch – you need to disclose your personal information, such as your home address.

This is a typical pyramid scheme. This is on Facebook instead of the old way of using letters because social media allows it to spread a lot faster.

Pyramid schemes are illegal either by mail or on social media if money or other items of value are requested with assurance of a sizeable return for those who participate.

If you receive a chain letter by mail, email or social media, especially one that involves money or gifts, the BBB recommends:

  • Start With Trust®. Check with BBB before becoming involved in suspicious and possibly illegal activity.
  • To avoid this scam, the best thing to do is completely ignore it altogether. Do not give out personal information to anyone.
  • Chain letters via social media and U.S. mail that involve money or valuable items and promise big returns are illegal. If you start a chain letter or send one, you are breaking the law.
  • Chances are you will receive little or no money back on your “investment.” Despite the claims, a chain letter will never make you rich.
  • Some chain letters try to win your confidence by claiming they’re legal and endorsed by the government.

The U.S. Postal Inspection Service offers information about chain letters at www.usps.gov/websites/depart/inspect, or you can call the Postal Inspection Service toll-free at 1-888-877-7644.

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