Officials say social media gift exchange is illegal pyramid scheme


    A gift chain is spreading on social media, but the federal government says it's a pyramid scheme and should be avoided. (WGME)

    PORTLAND (WGME) – A gift chain is spreading on social media, but the federal government says it's a pyramid scheme and should be avoided.

    Paula Fleming says the posts are flooding her Facebook feed.

    Fleming is with the Better Business Bureau, and warning people this season about the "secret sister" gift exchange.

    “We have seen an uptick this holiday season, it started a few weeks ago and it's basically a pyramid scheme,” Fleming said.

    It’s a scheme the U.S. Postal Inspection Service says is illegal, opening people up to disappointment and also exposing sensitive information on Facebook, like your address.

    The federal agency first warned about it three years ago.

    “I don't think anybody is doing this to be malicious other than the people who began it back in 2015,” Fleming said.

    The social media scheme asks people to send a gift to their "secret sister," promising up to 36 presents in return.

    “This type of gift exchange may seem reasonable enough in theory, six friends invite six more friends, who wouldn't want to give one gift to receive six gifts?” Fleming said.

    But according to the postal inspectors, while the people at the top of the pyramid might benefit, each layer needs to attract new recruits and is mathematically impossible to sustain.

    “Who wouldn't want to give and receive, the problem is people aren't aware exactly what they are doing, they think they are doing innocent little fun holiday festive giving,” Fleming said.

    Postal inspectors say pyramid schemes are illegal and those who participate could be charged with mail fraud.

    News In Photos

      Loading ...