26 Nov

Beware Criminal Nature of ‘Secret Sister’ Gift Exchanges

BBB warns postal gift exchanges are a pyramid scheme, constituting illegal gambling in Canada.

BBB Warns Postal Gift Exchange is Pyramid Scheme, Illegal Gambling in CanadaDay in and day out, the Better Business Bureau (BBB) is tasked with investigating claims of industrial malpractice. They warn the public of any duplicitous activities they find along the way. For the last few years, the organization has been warning people against partaking in questionable Secret Santa style gift exchanges that aren’t just a rip-off. They can get participants in trouble with the law.

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Most of us are familiar with gift exchanges during the holiday season. They are innocent affairs, often held within an office setting. Each person purchases of a gift, not to exceed a certain value, and secretly gives it to another person. Everyone buys a gift—every gets a gift. It’s all fair and each participant has a good time.

But some gift exchanges aren’t so fair… especially the ones being advertised on social media pages like Facebook. The BBB is trying to ensure that no one else falls victim to these popular scams.

BBB Warns Against Pyramid Gift Exchanges

It all started in 2015 when the ‘Secret Sisters‘ gift exchange appeared. To participate, a person was required to send one $10 gift to the address provided to them. They would, in turn, receive a gift of equal value from another participant. Not just one gift, though. The gift exchange promises each person will receive as any as 36 gifts.

That last specification makes the whole scheme illegal. Most of you will recognize it as a pyramid scheme. It begins with 6 friends. Each of the friends invites six more friends. Those invited are asked to send a gift to the person at the top of the list. That person’s name is then crossed off. The next set of recruits will send gifts to the second person on the list, and so on.

According to BBB, the Secret Sisters gift exchange is still in circulation, as are many other scams like it. And the pyramidal aspect isn’t the only thing illegal about them.

Illegal Gambling in Canada, Mail Fraud in US

You might not consider a seemingly innocent gift exchange to be anything remotely similar to gambling, but it is. Think about the design for a moment. Participants are paying a price ($10) to purchase something of value (a gift), granting them permission to participate in activity in which they hope to—but are not guaranteed to—receive something of value; something possibly worth much greater value than their original investment.

How is this not the exact definition of gambling? The BBB points that out too, as well as the fact that, according to the US Postal Inspection Service, pyramid gift exchanges also constitute mail fraud.

U.S. Postal Inspectors investigate any crime in which the U.S. Mail is used to further a scheme–whether it originated in the mail, by telephone, or on the Internet. The use of the U.S. Mail is what makes it mail fraud.”

The BBB has advice for anyone who receives an invitation to join the Secret Sisters or any other similar gift exchange. If the invitation comes by way of email or conventional mail, simply ignore and delete it, or throw it away. If the invitation appears on your Facebook account, report it as a scam by pressing the three buttons in the top right corner of the post.

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